Council Enacts Legislation for Prepayment of 2018 Property Taxes in 2017

Today we approved Bill 42-17, Property Tax Advance Payment — Authorized.  This bill enables county residents the option to prepay their 2018 property tax this year. Here is the full press release and links to the county website with detailed instructions:

The Montgomery County Council held a special legislative session today to enable residents to prepay their 2018 county property tax in 2017.  By a 7-1 vote, the Council enacted Bill 42-17, Property Tax Advance Payment — Authorized.  The bill gives county residents the option to prepay their 2018 property tax this year.   The bill requires the county to refund any amount paid that is greater than the property tax owed and would permit the county to bill the property owner for any amount of the prepayment that is less than the 2018 property tax once it is finally determined.

 “Creating this prepayment option may open the door for many middle-class county residents to get a final year of benefit from deducting their property tax on their 2017 federal tax return,” said Council President Hans Riemer.  “Initial speculation was that only the most affluent residents could take advantage of this option. But with the benefit of public input, we now know that the prepayment option will be a potential benefit to thousands of county residents of more average means.”  

 Maryland tax law authorizes the governing body of a county to enact a law permitting taxpayers to make an advance payment of county property tax.  State law requires that the advance payment must be the full amount of county property tax owed for the prior year. 

 On Dec. 22 President Trump signed the federal Tax Reform Act into law. The act will limit the deduction for state and local income, sales, and property tax to $10,000 beginning in 2018.  The advance payment of 2018 property tax before the end of 2017 may be deductible for some taxpayers on their 2017 federal income tax return.

 Montgomery County’s Finance Department encourages county taxpayers who intend to prepay their 2018 property tax this year to mail their payment.  The county is providing information on the websites of the county, the Finance Department, and the Council, and also via the Paperless Airplane and Regional Services Center newsletters and on social media.

 Before mailing a payment, residents must print a Notice of Intent form located on the websites, fill it out, sign it, and mail it with their payment to the Treasury Office: 255 Rockville Pike, Suite L-15, Rockville, MD 20850.  

 State law requires that residents who intend to prepay their property tax must pay the full amount of their 2017 county property tax.  If residents owe property tax for the current or prior years, the payment will be applied to any past due amount before it is applied to any advance payment.

 Residents are encouraged to consult with their tax advisor to understand whether prepaying their 2018 property tax this year will benefit their tax situation.  Montgomery County makes no representation as to whether the prepayment may be deducted for federal income tax purposes.

 Instructions and more information on property tax prepayment for 2018 can be found at:

http://montgomerycountymd.gov/finance/Resources/Files/2018_prepay/Property_Tax_Prepayment_Info_V2.pdf

Submissions must include a signed Notice of Intent form, which can be found at:

http://www.montgomerycountymd.gov/finance/Resources/Files/2018_prepay/Notice_of_Intent.pdf  .

A checklist for prepaying 2018 property taxes can be found at:

http://www.montgomerycountymd.gov/finance//Resources/Files/2018_prepay/Checklist_flyer.pdf  .

Apply Now for Property Tax Credit for Long-time Homeowners

Visit the Department of Finance's Web site to get more information on Bill 42-16 that creates a new property tax credit for residents who are at least 65 years old and who have either lived in the same home for at least 40 years or are retired veterans of the U.S. military. The application form is at the bottom of the page.

Property Tax Credit for Long-time Homeowners and Retired Veterans

Good news, today we approved my bill to create a new property tax credit for residents who are at least 65 years old and who have lived in the same home for at least 40 years. The bill also provides a tax credit for residents 65 or older who are retired veterans of the U.S. military.

As introduced, Bill 42-16 would have created a new property tax credit for residents who are at least 65 years old and who have lived in the same home, with an assessed value of $500,000 or less, for at least 40 years. Retired members of the U.S. Armed Forces (Army, Navy, Marines, Air Force and Coast Guard) who are at least 65 years old also are eligible for the credit if their home has an assessed value of $500,000 or less.

However, the approved bill included an amendment that increases the maximum assessed value for eligibility for 40-year homeowners to $650,000.

Residents who qualify are eligible to receive a 20-percent credit for the property tax imposed on their homes. The credit would be granted annually for up to five years, subject to application requirements.

We want to do whatever we can to encourage people who love living in Montgomery County to continue to be able to live here as their life circumstances change. We understand that this can be an expensive place to live for many people at the prime of their earning power, and it gets more challenging for those in retirement years. With this bill, we can offer some help to people who have lived here a long time and helped build this County and to those who served our country and helped preserve and protect all the things for which we are thankful.

The bill will go into effect on July 1, 2017. Those seeking a credit must apply by April 1 of the year in which the tax credit is sought. However, for 2017 only, the deadline was extended to September 1. I'll let you know when the application process has been finalized.

Tax Credit for Seniors in their Home More than 40 Years

Tomorrow I will introduce Bill 42-16 that would create a new property tax credit for residents who are at least 65 years old and who have lived in the same dwelling for at least 40 years. Retired members of the U.S. armed forces who are at least 65 years old also would be eligible for the tax credit. See the video.

Councilmembers Sidney Katz, Nancy Navarro and Craig Rice are co-sponsors of the bill.  A public hearing is scheduled for 1:30 p.m. on Tuesday, November 15. If you can't make the hearing, you can also send your testimony to county.council@montgomerycountymd.gov.

Residents who qualify for the credit would be eligible to receive a 20 percent credit for the property tax imposed on their property. The credit would be granted annually for five years subject to application requirements.       

The dwelling for which a property tax is sought must have a maximum assessed value of $500,000 or less.

We want to do whatever we can to encourage people who love living in Montgomery County to continue to be able to live here as their life circumstances change. We understand that this can be an expensive place to live for many people at the prime of their earning power, and it gets more challenging for those in retirement years. With this bill, we can offer some help to people who have lived here a long time and helped build this County and to those who served our country and helped preserve and protect all the things for which we are thankful.

Look Out for Property Tax Scam

Don't fall for a deceptive letter about your property tax. Here's the full press release from our Office of Consumer Protection:

Montgomery County’s Office of Consumer Protection (OCP) is warning property owners not to be fooled by a deceptive letter which encourages consumers to pay $99 to petition to have their property tax assessment reviewed.

This direct mail solicitation gives the false appearance that it is from a state or local government agency, provides a return address that is, in reality, a mail-drop location, and fails to disclose that there is actually no cost for property owners in Montgomery County to personally petition for a tax assessment review.

Information regarding this matter has been reported to the U.S. Postal Inspection Service. Consumers who have provided credit card information or sent checks to this merchant may file a complaint with Montgomery County’s Office of Consumer Protection.

The Maryland State Department of Assessment and Taxation provides information on its website regarding how to file a petition to have a property tax assessment reviewed.

OCP, the County’s consumer protection agency, investigates thousands of complaints each year involving automotive sales and repairs, new home purchases, home improvements, credit issues, retail sales, internet services and most other consumer transactions. OCP provides pre-purchase information to consumers, as well as speakers to the community on consumer issues.
For more information, call 240-777-3636 or visit OCP’s website at www.montgomerycountymd.gov/consumer.

Property Values Fell in Maryland but Rose in Montgomery

In Maryland, properties are reassessed by the Maryland Department of Assessments and Taxation every three years. This is so that property owners pay only their fair share of local property taxes. If your property was reassessed this year, you would have received a notice from SDAT around January 1.

The 678,763 reassessments conducted this year reflect another decrease in real estate values for residential properties in Maryland. Statewide, residential values fell by 6.9 percent while 76.8 percent of properties decreased in value since their last assessment in 2010.

However, in Montgomery County, residential values rose by 1.7 percent while 45.2 percent of properties decreased in value.

Statewide, residential and commercial values combined fell by 3.6 percent. These values rose in only two counties—Montgomery and Howard, at 4.1 percent and 2.5 percent respectively.

Learn more.