Maryland bill proposes tax credit for non-primary residences to attract homeowners

During a recent Budget and Taxation Committee session, Maryland lawmakers discussed a proposed bill aimed at establishing a property tax credit for non-primary residences, such as vacation homes and cabins. This initiative seeks to address the growing trend of Maryland residents purchasing secondary homes in neighboring states, particularly Delaware, due to more favorable property tax rates.

The bill, introduced by a senator who shared personal anecdotes about friends opting for properties in states with lower taxes, aims to incentivize Marylanders to keep their vacation homes within the state. To qualify for the tax credit, property owners would need to submit a written application along with the deed for their non-primary residence. Unlike the existing homestead tax credit, which is capped at 10%, this new credit would allow for a cap of 15%, determined by local municipalities and counties.

The senator emphasized that while there may be concerns about potential revenue loss for local governments, the primary goal is to retain Maryland residents and encourage them to invest in their home state. The discussion highlighted the importance of creating a favorable environment for property ownership in Maryland, particularly as residents seek alternatives in states with more attractive tax structures.

The committee also heard from representatives of the Maryland Association of Counties, indicating a shift in their stance regarding the bill, which may suggest a growing recognition of the need to balance revenue concerns with the desire to keep residents engaged in the local economy.

As the committee continues to evaluate this proposal, the implications for Maryland's property tax landscape and its impact on local communities remain a focal point of discussion. The outcome of this bill could significantly influence the state's appeal to current and prospective homeowners, shaping the future of property ownership in Maryland.