Property Tax - Tax Credit for Nonprimary Residence
SB 822 creates a new property tax credit for certain “nonprimary residences” in Maryland. The bill defines a nonprimary residence generally as a home that is not the owner’s principal residence, is occupied or expected to be occupied by the owner for fewer than six months in a 12-month period, and is not already eligible for the existing homeowner property tax credit. It also covers certain condominiums, cooperative apartments, mixed-use property used as a principal residence, and some trust and agricultural ownership entity arrangements, while excluding property held primarily for rental, investment, or income generation.
The credit would apply against State, county, municipal corporation, and bicounty commission property taxes, and would be based on a formula comparing the prior year’s taxable assessment to the current year’s assessment. Counties and Baltimore City would be required to set a nonprimary residence credit percentage by law, and municipalities could set their own percentage within a specified range. The bill also establishes application procedures, deadlines, retroactive eligibility in some cases, audit and administration responsibilities, and a requirement that the credit appear on the property tax bill. The bill takes effect June 1, 2025, and applies to taxable years beginning after June 30, 2025.
SB 822 would add a new section to the Tax-Property Article of the Annotated Code of Maryland, creating a statewide framework for a nonprimary residence property tax credit. It would require the Department of Assessments and Taxation to administer applications, calculate credits, adopt regulations, and coordinate audits with the Comptroller, while shifting some administrative reimbursement costs to counties. Local governments would gain authority—and in the case of counties and Baltimore City, an obligation—to establish the percentage used in the credit calculation, within statutory limits.
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available materials. Based on the bill text alone, the measure appears designed to provide tax relief to owners of qualifying secondary homes while preserving local control over the credit percentage. The structure suggests a policy interest in limiting the credit to certain owner-occupied, non-investment properties and in preventing automatic application to rental or income-producing real estate.
The main points of potential contention are likely to be the scope of eligibility and the fiscal impact on State and local revenues. The bill’s definition of nonprimary residence is broad enough to include some mixed-use, trust-held, and agricultural-entity-owned properties, which could raise questions about who benefits. Local governments may also object to being required to set a credit percentage and to the possible revenue loss from a credit that can reach up to 115% of the prior year’s taxable assessment adjustment. Administrative burdens, including application processing, audits, and reimbursement obligations, may also be disputed.