Maryland Homestead Tax Credit: What You Need to Know in 2025
Last week, Maryland homeowners received their property tax assessments, and many were surprised to see significant increases in their home values, with some noticing jumps of 20% or more. While these rising assessments highlight the incredible equity many of us have gained in our homes, they also bring concerns about potential increases in property taxes. Thankfully, Maryland offers the Homestead Tax Credit, a program designed to help homeowners manage their property tax bills by capping the amount they can increase annually.
What is the Maryland Homestead Tax Credit?
The Maryland Homestead Tax Credit is a safeguard for primary homeowners, limiting the annual increase in taxable assessments, regardless of how much the home's market value has increased. The credit prevents property taxes from skyrocketing, even when home values rise dramatically. In most counties, the cap is set at 10%, but some jurisdictions offer even lower caps.
For example, if your home's assessment jumps from $100,000 to $120,000 (a 20% increase), the tax credit caps the increase at 10%, or $110,000. This means you're taxed on a lesser value, saving you money.
Who Qualifies for the Homestead Tax Credit?
To qualify for the Maryland Homestead Tax Credit, you must meet the following criteria:
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The property must be your primary residence.
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You must have lived in the property for at least six months of the previous year (including July 1 of the tax year).
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The property must not be used for business purposes or rental income.
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You must file a one-time application with the Maryland State Department of Assessments and Taxation (SDAT).
How to Apply for the Homestead Tax Credit
If you haven’t already applied for this credit, now is the time to do so! The application process is straightforward and only needs to be completed once:
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Gather Your Information: Have your property account number and access to your most recent assessment notice.
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Visit the SDAT Website: Go to the official SDAT website to find the application form.
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Complete the Application: Fill out the application and provide the necessary verification details.
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Submit Your Application: Submit online or via mail, following the instructions on the form.
Already Applied? Here’s How to Check Your Status
Why Act Now?
If your recent property tax assessment showed a large increase in value, applying for the Homestead Tax Credit could make a big difference in your annual tax bill. By limiting how much of your home’s value can be taxed each year, you’ll have more predictable and manageable property tax payments moving forward. The sooner you apply, the sooner you can start benefiting from this protection.
While processing might take up to a year, once approved, the credit remains effective as long as you own the property. Keep an eye on SDAT for updates, as no direct notification is sent.
Key Takeaways
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Rising home values have increased equity for Maryland homeowners, but they can also lead to higher tax bills.
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The Maryland Homestead Tax Credit helps cap the annual increase in taxable assessments.
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Eligibility requires that the property is your primary residence, and a one-time application is necessary.
For more information or assistance navigating the application process, feel free to reach out to us. At The Jen Holden Group, we’re here to help you make the most of your homeownership experience—whether it’s understanding tax credits or finding your next dream home.
Jen Holden, Realtor® | Principal The Jen Holden Group of Compass 📱 443.803.7620 (m) | 📞 410.429.7425 (o) License #639966 ✉️ jen@thejenholdengroup.com 🌐 www.movewithjhg.com
