Maryland homestead tax credit cap calculator.

What the credit does

The Homestead Tax Credit Program in Tax-Property section 9-105 then limits how fast the assessment taxed for a principal residence can rise. When the assessment goes up by more than the allowed percentage, the State, county and municipal governments each grant a credit against their property tax for the excess. The credit is applied to State, county, municipal and bicounty commission property tax under section 9-105(b).

The formula

Section 9-105(e)(1) calculates the credit each taxable year by multiplying the prior year’s taxable assessment by the homestead credit percentage, subtracting that from the current year’s assessment, and, if the difference is positive, multiplying it by the applicable property tax rate for the current year. The percentage differs by level of government. For the State tax and any bicounty commission tax it is 110%. For county and municipal tax it is whatever the local government sets by law, and it may not be less than 100% or more than 110%, in increments of 1 percentage point (section 9-105(e)(5)). Counties set it by March 15 for the taxable year beginning the following July 1; municipalities by March 25. If a county or town does not set one, the prior year’s percentage carries over.

Who qualifies

The credit is for a “dwelling” used as the principal residence of the homeowner and actually occupied or expected to be occupied by the homeowner for more than six months of a 12-month period. The homeowner must actually reside there by July 1 of the taxable year, may claim the credit on only one dwelling, and loses it for a year if during the previous taxable year the dwelling was transferred for consideration to new ownership, its value rose because of a zoning change the owner requested, its use changed substantially, or the assessment was clearly erroneous (section 9-105(d)). A credit under $1 is not granted.

How to apply

Section 9-105(d)(6) requires an application on the Department’s form with a statement under oath, filed on or before May 1 preceding the first taxable year for which the credit is to be allowed. If a dwelling that previously received the credit lost it for one year because of a failure to file, the Department grants it for the next year on timely filing and calculates the prior year’s assessment as if the credit had not been lost. For a homeowner at least 70 who was eligible the prior year but did not apply, the Department calculates the current year’s assessment as if the credit had been granted, without reimbursing past taxes. The Department must also give notice of the possible credit and mail notice to buyers who have not applied after acquiring a home.

Worked example

Last year’s taxable assessment was $300,000 and this year’s is $360,000. At the State’s 110 percent, the assessment taxed is $330,000, so $30,000 is the excess; at a State rate of 0.112 percent the State credit is $33.60. For a county that has set 105 percent, the taxed assessment is $315,000 and the excess is $45,000; at a county rate of 1.00 percent the credit is $450.00. A town at 100 percent would tax $300,000, with a $60,000 excess; with no town rate entered its credit is zero. The total credit is $483.60 on a gross tax of $4,003.20, leaving $3,519.60. The county percentage matters most, because every point lowers the taxed assessment by 1 percent of last year’s figure.

Limits of this page

We did not read the Maryland Department of Assessments and Taxation program page, which returned a not-found error to an automated request, so deadlines are taken from the statute. We do not know your county or town percentage or your rates, so you must enter them; check your assessment notice and your county’s homestead cap. This is general information, not tax advice. The credit is applied by the taxing authorities, and the statute text we read was the version on the Maryland General Assembly website on November 2, 2026.

Sources

Sources opened and read November 2, 2026.

• Maryland General Assembly: Tax-Property, section 9-105, Homestead Tax Credit (read November 2, 2026)