Baltimore City Council Approves Property Tax Relief for Homeowners

Baltimore's City Council has approved a modest property tax relief plan that is expected to impact homeowners beginning July 1. Mayor Brandon Scott, alongside several council members, announced the initiative, which aims to alleviate some of the financial pressures faced by residents.

The current property tax rate in Baltimore stands at $2.248 per $100 of assessed value, the highest in Maryland. City officials acknowledge that this rate has posed challenges for homeownership and has hindered growth within the city.

While the overall tax rate will remain unchanged, the effective rate—what homeowners actually pay after exemptions and credits—will see a slight decrease. Homeowners benefiting from the Targeted Homeowners Tax Credit currently pay an effective rate of $2.04, which will drop to $2.03 on July 1. A further reduction to $1.99 is anticipated in the next budget year, effective mid-2027.

This reduction comes at a cost of approximately $2 million to the city's budget, which totals $4.9 billion. To help offset this expense, city leaders have agreed to raise the cap on the Homestead Property Tax Credit, which limits annual increases in a homeowner's tax bill to 4%. Starting in fiscal year 2028, this cap will increase to 5%, potentially reducing the overall tax relief for some homeowners.

For instance, a homeowner with a property valued at $200,000 could expect a reduction of about $20 in their tax bill next year. In the following year, with the effective rate at $1.99, savings could increase to $106 if the property value rises by 10% at reassessment. However, if the property experiences a 25% increase, the savings would be reduced to approximately $70.

The plan is a scaled-back version of an earlier proposal by the Scott administration, which had suggested a more significant reduction in the effective rate and a higher cap on the Homestead Credit. Councilman Isaac “Yitzy” Schleifer expressed concerns over the potential for tax increases for some residents if the cap was raised, indicating that the change could disproportionately affect long-term homeowners.

Despite these concerns, city officials maintain that the majority of homeowners will benefit from the changes. The administration has also introduced an online calculator to help residents estimate their savings under the new tax structure.

Reported by HarborBeat based on thebanner.com (source).