Montgomery County committee backs widening homeowners tax-credit eligibility and links caps to inflation

The Government Operations and Fiscal Policy Committee voted 3-0 to recommend that the full Montgomery County Council consider Bill 3-25, a proposal to expand the county supplement to the state Homeowners Tax Credit (HOTC).

The bill would raise the combined household income eligibility from $60,000 to $75,000 and the net-worth limit from $200,000 to $250,000, increase the assessed-value ceiling that can qualify for the supplement from $300,000 to $375,000, and modify the credit's progressive scale. It also links the dollar thresholds in the county supplement to inflation going forward.

Committee staff member Ms. Wellens said the county is currently aligned with the state HOTC criteria and that the bill’s changes are intended “to allow more of our homeowners to be eligible and take advantage of this.” She added: "I should note that the net worth calculation excludes the dwelling for which the property is sought, cash value of life insurance, cash value of, qualified retirement savings or individual retirement accounts, and any tangible personal property." She also noted the supplement would continue to be administered by the state and that the Office of Management and Budget estimated roughly $100,000 a year would be paid to the state for administering the county supplement rather than the county running the program itself.

Council Member Friedson described the change as a targeted step to help homeowners on fixed incomes and said it could amount to "up to $2,500 nearly in property tax relief for those who make limited incomes." Friedson added that while he would prefer broader changes, the committee’s approach uses the existing HOTC framework to keep implementation manageable.

Committee members and staff noted the county last altered its supplemental HOTC limits in February 2006 and that rising assessments and inflation have increased the need to update the thresholds. A committee speaker said municipalities are watching Montgomery County’s model for potential adoption.

The committee’s formal action was a recommendation—recorded in committee as 3-0—to forward Bill 3-25 to the full Council for consideration. No amendments were introduced in the committee hearing.

Next steps: the bill will be scheduled for consideration by the full Montgomery County Council, where final approval would be required to change county supplement eligibility and indexing.