Who's reaping the most benefit from the Homestead tax break?
Anne Arundel County residents are getting good use out of the Homestead break: They won't be billed for property taxes on about $12 billion in assessed value in the fiscal year that starts in July, according to the state Department of Assessments and Taxation.
That's by far the top amount in the state, helped along by the county's fairly low Homestead cap. The tax break puts a ceiling on how much of an owner-occupant's assessed value can be taxed in a given year, and in Anne Arundel, the increase can't top 2 percent annually. (Statewide, the cap ranges from a high of 10 percent to a low of zero. Yes, zero.)
No. 2 for Homestead use: Baltimore County, at $6.7 billion in untaxed assessed value.
The effect of the Homestead tax break isn't spread evenly around the state, thanks at least in part to the range in caps. Six jurisdictions have Homestead-shielded assessable amounts that come to nearly 10 percent or more of their total assessable bases. (Talbot's comes to a whopping 30 percent.) But it's 1 percent or less in 10 other jurisdictions.
Here's the breakdown:
| Jurisdiction | Homestead-shielded assessable value | Net assessable base | % of total | Homestead cap |
|---|---|---|---|---|
| Anne Arundel | $12,246,575,955 | $62,458,477,045 | 20% | 2% |
| Baltimore Co. | $6,733,456,431 | $72,393,490,569 | 9% | 4% |
| Prince George's | $6,196,806,426 | $69,286,396,574 | 9% | 1% |
| Baltimore City | $4,699,359,146 | $32,129,661,854 | 15% | 4% |
| Talbot | $2,229,766,998 | $7,451,750,002 | 30% | 0% |
| Howard | $1,895,828,508 | $40,252,904,492 | 5% | 5% |
| Queen Anne's | $774,807,516 | $7,303,692,484 | 11% | 0% |
| St. Mary's | $694,506,403 | $11,936,993,597 | 6% | 5% |
| Worcester | $539,440,971 | $15,478,741,029 | 3% | 3% |
| Frederick | $309,753,781 | $25,159,378,219 | 1% | 5% |
| Carroll | $208,691,638 | $17,729,309,362 | 1% | 5% |
| Washington | $206,459,731 | $12,207,708,269 | 2% | 5% |
| Kent | $194,739,141 | $2,769,235,859 | 7% | 5% |
| Garrett | $143,546,024 | $4,713,403,976 | 3% | 5% |
| Dorchester | $116,046,456 | $2,685,953,544 | 4% | 5% |
| Montgomery | $105,036,917 | $162,200,049,083 | 0.1% | 10% |
| Caroline | $98,065,413 | $2,297,502,587 | 4% | 5% |
| Charles | $96,000,996 | $15,644,873,004 | 1% | 7% |
| Harford | $71,275,597 | $25,123,814,403 | 0.3% | 5% |
| Allegany | $33,810,408 | $3,594,488,592 | 1% | 7% |
| Cecil | $33,437,819 | $9,789,691,181 | 0.3% | 8% |
| Calvert | $20,577,212 | $12,451,906,788 | 0.2% | 10% |
| Wicomico | $12,189,368 | $6,227,409,632 | 0.2% | 10% |
| Somerset | $11,265,286 | $1,534,595,714 | 1% | 10% |
| TOTAL | $37,671,444,141 | $622,821,427,859 | 6% |
Thoughts?
Categories: Homestead Property Tax Credit, Property taxes
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Comments
May I invoke Susan Powter?
Stop The Insanity!
The whole system is a calculus designed as a way to manipulate other even more spurious numbers. How about using the actual and well known Fair Market Value numbers for residential property instead?
Every property (including the land it is on) currently has an agreed upon fair market value; agreed upon by the current owner and (ta dah!) it is already a matter of public record. Done.
All that leaves is the maximum percentage rate to be applied against that number. This rate and possible discounts to it (eg owner occupied vs rental) can be argued every which way but without first establishing a static and unassailable numerator for that calculation... it all becomes just so much a game a hot potato.
All that leaves is to lock in that calculation number for a fixed period... with a known in advance formula to adjust the discount at those fixed intervals (10 years?).
The mixed average of residential properties (including the land they are on) will change hands within ten years... nearly all within twenty. When they do, their new and ACTUAL market value at that time will set establish the amount of RE Tax to be applied. Done.
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Posted by: MrRational | March 3, 2011 12:09 PM
A related question that should be asked is "Who's reaping the most benefit from high Homestead tax caps?" The answer: Public employees in the counties with high (10%) homestead caps.
In the counties with low homestead caps, county governments were effectively prevented from going hog-wild spending bubble-generated property tax revenues on outrageous raises for public employees and on projects that were not economically sustainable. In contrast, in Montgomery County, where the homestead cap is set to the state maximum of 10%, the county council used the bubble-generated property tax revenue to fund extraordinary salary increases and other projects that are no longer affordable in the post-bubble economy.
Posted by: Louis Wilen | March 3, 2011 2:49 PM
Thanks for the very enlightening figures. It is always interesting to see how the numbers shake out. There will always be "winners" and "losers" as no tax system is perfect.
Posted by: Johnson Tygart | March 6, 2011 8:40 AM