Washington County - Homestead Property Tax Credit - Eligible Properties

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1127*

HOUSE BILL 1127
Q2 6lr2238

By: Delegates Wivell, Baker, Schindler, and Valentine
Introduced and read first time: February 11, 2026
Assigned to: Ways and Means

A BILL ENTITLED

AN ACT concerning 1

Washington County – Homestead Property Tax Credit – Eligible Properties 2

FOR the purpose of expanding eligibility for the homestead property tax credit to include 3
additional residences in Washington County; and generally relating to the 4
homestead property tax credit. 5

BY repealing and reenacting, with amendments, 6
Article – Tax – Property 7
Section 9–105(a), (c)(1) and (4), (d), (f), (g), and (i) 8
Annotated Code of Maryland 9
(2019 Replacement Volume and 2025 Supplement) 10

BY repealing and reenacting, without amendments, 11
Article – Tax – Property 12
Section 9–105(c)(2) and (3) and (k) 13
Annotated Code of Maryland 14
(2019 Replacement Volume and 2025 Supplement) 15

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF M ARYLAND, 16
That the Laws of Maryland read as follows: 17

Article – Tax – Property 18

9–105. 19

(a) (1) In this section the following words have the meanings indicated. 20

(2) “Active member” means: 21

(i) a shareholder in a family corporation; 22
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(ii) a partner in a general partnership; or 1

(iii) a member of a limited liability company or partner in a limited 2
liability partnership who has or shares the authority to manage, control, and operate the 3
limited liability company or limited liability partnership and who shares the assets and 4
earnings of the limited liability company or limited liability partnership under an operating 5
agreement under § 4A –402 of the Corporations and Associations Article or under a 6
partnership agreement. 7

(3) “Agricultural ownership entity” means a family corporation, general 8
partnership, limited liability company, or limited liability partnership that: 9

(i) owns real property that: 10

1. includes land receiving an agricultural use assessment 11
under § 8–209 of this article; and 12

2. includes land used as a homesite that is part of or 13
contiguous to a parcel described in item 1 of this item; 14

(ii) owns personal property used to operate the agricultural land; 15
and 16

(iii) owns no other property. 17

(4) “Bicounty commission” means: 18

(i) the Maryland–National Capital Park and Planning Commission; 19

(ii) the Washington Suburban Sanitary Commission; or 20

(iii) the Washington Suburban Transit Commission. 21

(5) (i) “Dwelling” means: 22

1. a house that is: 23

A. used as the principal residence of the homeowner; and 24

B. actually occupied or expected to be actually occupied by 25
the homeowner for more than 6 months of a 12 –month period beginning with the date of 26
finality for the taxable year for which the property tax credit under this section is sought; 27
and 28

2. the lot or curtilage on which the house is erected. 29

HOUSE BILL 1127 3

(ii) “Dwelling” includes: 1

1. a condominium unit that is occupied by an individual who 2
has a legal interest in the condominium; 3

2. an apartment in a cooperative apartment corporation that 4
is occupied by an individual who has a legal interest in the apartment; and 5

3. a part of real property used other than primarily for 6
residential purposes, if the real property is used as a principal residence by an individual 7
who has a legal interest in the real property. 8

(6) “Family corporation” means a corporation that does not have any 9
stockholders other than the homeowner and the following members of the homeowner’s 10
family: 11

(i) a spouse or former spouse; 12

(ii) a child or stepchild; 13

(iii) a parent or stepparent; 14

(iv) a brother or sister; 15

(v) a son –in–law, daughter –in–law, stepson –in–law, or 16
stepdaughter–in–law; 17

(vi) a grandchild or stepgrandchild; or 18

(vii) a grandparent or stepgrandparent. 19

(7) “Homeowner” means an individual who has a legal interest in a 20
dwelling OR WASHINGTON COUNTY ADDITIONAL RES IDENCE or who is an active 21
member of an agricultural ownership entity that has a legal interest in a dwelling OR 22
WASHINGTON COUNTY ADDITIONAL RESIDENCE. 23

(8) “Legal interest” means an interest in a dwelling OR WASHINGTON 24
COUNTY ADDITIONAL RESIDENCE: 25

(i) as a sole owner; 26

(ii) as a joint tenant; 27

(iii) as a tenant in common; 28

(iv) as a tenant by the entireties; 29

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(v) through membership in a cooperative; 1

(vi) under a land installment contract, as defined in § 10 –101 of the 2
Real Property Article; 3

(vii) as a holder of a life estate; or 4

(viii) as a settlor, grantor, or beneficiary of a trust if: 5

1. the settlor, grantor, or beneficiary of the trust does not pay 6
rent or other remuneration to reside in the dwelling OR WASHINGTON COUNTY 7
ADDITIONAL RESIDENCE; and 8

2. legal title to the dwelling OR WASHINGTON COUNTY 9
ADDITIONAL RESIDENCE is held in the name of the trust or in the names of the trustees 10
for the trust. 11

(9) “Taxable assessment” means the assessment on which the property tax 12
rate was imposed in the preceding taxable year, adjusted by the phased –in assessment 13
increase resulting from a revaluation under § 8–104(c)(1)(iii) of this article, less the amount 14
of any assessment on which a property tax credit under this section is authorized. 15

(10) (I) “WASHINGTON COUNTY ADDITIONAL RESIDENCE” MEANS A 16
HOUSE LOCATED IN WASHINGTON COUNTY AND THE LOT OR CURTILAGE ON WHICH 17
THE HOUSE IS ERECTED. 18

(II) “WASHINGTON COUNTY ADDITIONAL RES IDENCE” 19
INCLUDES: 20

1. A CONDOMINIUM UNIT OF AN INDIVIDUAL WHO HAS A 21
LEGAL INTEREST IN THE CONDOMINIUM; 22

2. AN APARTMENT IN A CO OPERATIVE APARTMENT 23
CORPORATION OF AN INDIVIDUAL WHO HAS A LEGAL INTEREST IN THE APARTMENT; 24
AND 25

3. A PART OF REAL PROPE RTY USED OTHER THAN 26
PRIMARILY FOR RESIDE NTIAL PURPOSES , IF THE REAL PROPERTY IS USED AS A 27
RESIDENCE BY AN INDI VIDUAL WHO HAS A LEG AL INTEREST IN THE REAL 28
PROPERTY. 29

(c) (1) If a dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE is 30
not used primarily for residential purposes, the Department shall apportion the total 31
property assessment between the part of the dwelling OR WASHINGTON COUNTY 32
ADDITIONAL RESIDENCE that is used for residential purposes and the part of the dwelling 33
HOUSE BILL 1127 5

OR WASHINGTON COUNTY ADDITIONAL RES IDENCE that is not used for residential 1
purposes. 2

(2) If a homeowner does not actually reside in a dwelling for the required 3
time period because of illness or need of special care and is otherwise eligible for a property 4
tax credit under this section, the homeowner may qualify for the property tax credit under 5
this section. 6

(3) If a homeowner otherwise eligible for a credit under this section does 7
not actually reside in a dwelling for the required time period because the dwelling is 8
damaged due to an accident or natural disaster, the homeowner may continue to qualify for 9
a credit under this section for the current taxable year and 2 succeeding taxable years even 10
if the dwelling has been removed from the assessment roll in accordance with § 10 –304 of 11
this article. 12

(4) (i) For a homeowner who is an active member of an agricultural 13
ownership entity to qualify for the property tax credit under this section: 14

1. the dwelling OR WASHINGTON COUNTY ADDITIONAL 15
RESIDENCE must have been owned and occupied by the active member: 16

A. at the time of its transfer to the agricultural ownership 17
entity; or 18

B. if the agricultural ownership e ntity is a limited liability 19
company and the dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE was 20
originally transferred to the agricultural ownership entity as part of a conversion from a 21
partnership under § 4A–211 of the Corporations and Associations Article, then at the time 22
of its transfer to the former partnership; and 23

2. the agricultural ownership entity and the active member 24
who occupies the dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE must 25
file an application with the Department establi shing initial eligibility for the credit on or 26
before June 30 for the following taxable year and, at the request of the Department, must 27
file an application in any future year to verify continued eligibility. 28

(ii) Failure to file a timely application may result in disqualification 29
from the Homestead Tax Credit Program for the following taxable year. 30

[(iii) The credit may only be granted to one dwelling owned by the 31
agricultural ownership entity. 32

(iv) Participation in the credit program as the active member of an 33
agricultural ownership entity disqualifies any other dwellings owned by the active member 34
for the credit.] 35

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(d) (1) Subject to the provisions of paragraph [(6)] (5) of this subsection, the 1
Department shall authorize and the State, a county, or a municipal corporation shall grant 2
a property tax credit under this section for a taxable year unless during the previous 3
taxable year: 4

(i) the dwelling OR WASHINGTON COUNTY ADDITIONAL 5
RESIDENCE was transferred for consideration to new ownership; 6

(ii) the value of the dwelling OR WASHINGTON COUNTY 7
ADDITIONAL RESIDENCE was increased due to a change in the zoning classification of the 8
dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE initiated or requested by 9
the homeowner or anyone having an interest in the property; 10

(iii) the use of the dwelling OR WASHINGTON COUNTY 11
ADDITIONAL RESIDENCE was changed substantially; or 12

(iv) the assessment of the dwelling OR WASHINGTON COUNTY 13
ADDITIONAL RESIDENCE was clearly erroneous due to an error i n calculation or 14
measurement of improvements on the real property. 15

(2) [A homeowner must actually reside in the dwelling by July 1 of the 16
taxable year for which the property tax credit under this section is to be allowed. 17

(3)] A homeowner may claim a property tax credit under this section for 18
[only 1] A dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE. 19

[(4)] (3) If a property tax credit under this section is less than $1 in any 20
taxable year, the tax credit may not be granted. 21

[(5)] (4) (i) If the dwelling OR WASHINGTON COUNTY ADDITIONAL 22
RESIDENCE was transferred for consideration in a deed dated on or after January 1 but 23
before the beginning of the next taxable year and the deed was recorded with the clerk of 24
the circuit court or the Department on or after July 1 but before September 1 of the next 25
taxable year, the new owner may submit a written application to the Department on or 26
before September 1 of the second taxable year following the date of the deed requesting 27
that the date of the deed be accepted by the Department as the date of transfer under 28
paragraph (1) of this subsection. 29

(ii) 1. The applicant shall submit with the written application a 30
copy of the executed deed evidencing the date of the transfer. 31

2. If the applicant fails to submit a copy of the executed deed 32
as required under subsubparagraph 1 of this subparagraph, the Department shall deny the 33
application. 34

HOUSE BILL 1127 7

(iii) The date of the transfer under this paragraph is the effective date 1
of the deed as described under § 3–201 of the Real Property Article. 2

(iv) If a homeowner submits an eligible application under this 3
paragraph after May 1 of the first taxable year following the date of the deed and the 4
homeowner is due to receive a reduction in the homeowner’s property tax bill in the second 5
taxable year followi ng the date of the deed as a result of the credit under this section, 6
property tax is not due on the dwelling OR WASHINGTON COUNTY ADDITIONAL 7
RESIDENCE for the second taxable year following the date of the deed until 30 days after 8
a revised tax bill is sent to the homeowner. 9

[(6)] (5) (i) Except as provided under paragraph [(7)] (6) of this 10
subsection, to qualify for the credit under this section, a homeowner shall submit an 11
application for the credit to the Department as provided in this paragraph. 12

(ii) The application shall: 13

1. be made on the form that the Department provides; 14

2. provide the information required by the form; 15

3. include a statement by the homeowner under oath that the 16
facts stated in the application are true, correct, and complete; and 17

4. except as provided in subparagraph (iii) of this paragraph, 18
be filed on or before the May 1 preceding the first taxable year for which the property tax 19
credit under this section is to be allowed. 20

(iii) For a dwelling OR WASHINGTON COUNTY ADDITIONAL 21
RESIDENCE that was last transferred for consideration to new ownership on or before 22
December 31, 2007, an application shall be filed with the Department on or before 23
December 30, 2013, or the Department may not authorize and the Stat e, county, and 24
municipal corporation may not grant the property tax credit under this section: 25

1. for the taxable year beginning July 1, 2014; and 26

2. for a taxable year beginning after June 30, 2015, unless an 27
application is filed as required under subparagraphs (i) and (ii) of this paragraph. 28

(iv) If a dwelling OR WASHINGTON COUNTY ADDITIONAL 29
RESIDENCE previously received a credit under this section and failed to qualify for 1 30
taxable year because of a failure to file the application required under this paragraph, the 31
Department: 32

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1. shall grant the credit for the dwelling OR WASHINGTON 1
COUNTY ADDITIONAL RESIDENCE for the next following taxable year on the timely filing 2
of the application by the same homeowner who previously received the credit; and 3

2. shall calculate the prior year’s taxable assessment for the 4
dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE as if the credit had not 5
been lost for the 1 intervening taxable year. 6

(v) The Department shall provide a homeowner the option to submit 7
the application required under this paragraph electronically on the Department’s website. 8

[(7)] (6) If a homeowner submits an application to the Department under 9
this section and the Department determines that the homeowner was eligible for the credit 10
in the prior taxable year but failed to file an application for the credit as required under 11
this subsection: 12

(i) the homeowner shall be retroactively qualified for the 13
Homestead Property Tax Credit Program for the prior taxable year; and 14

(ii) the Department shall calculate the prior year’s taxable 15
assessment as if the credit had been granted for the prior taxable year. 16

[(8)] (7) (i) This paragraph shall be interpreted broadly to apply to 17
any homeowner who: 18

1. is at least 70 years of age; 19

2. was eligible for the credit in the prior taxable year but 20
failed to file an application for the credit; and 21

3. applies for a credit for the current taxable year. 22

(ii) For homeowners that meet the criteria under subparagraph (i) of 23
this paragraph, the Department shall calculate the current year’s taxable assessment as if 24
the credit had been granted for the prior taxable year. 25

(iii) A homeowner who meets the criteria under subparagraph (i) of 26
this paragraph is not due a reimbursement of property taxes paid in prior taxable years. 27

(f) (1) The Department shall give notice of the possible property tax credit 28
under this section. 29

(2) In addition to any other notice the Department provides under this 30
subsection, the Department shall: 31

(i) identify homeowners who may be eligible but have failed to apply 32
for the property tax credit under this section; and 33
HOUSE BILL 1127 9

(ii) include a separate insert with each assessment notice sent under 1
§ 8–401 of this article to each homeowner identif ied under item (i) of this paragraph that 2
informs the homeowner that the homeowner may be eligible for the property tax credit 3
under this section and how to apply for the credit. 4

(3) In addition to any other notice the Department provides under this 5
subsection, the Department shall mail a notice to each individual who acquires residential 6
real property and has not applied for the credit under this section within a reasonable 7
period of time after the individual[: 8

(i)] acquires the property by recorded deed[; and 9

(ii) indicates that the property will be the individual’s principal 10
residence on the corresponding land instrument intake sheet described under § 3 –104 of 11
the Real Property Article]. 12

(4) The notice required under paragraph (3) of this subsection shall: 13

(i) inform the individual that the individual may be eligible for the 14
property tax credit under this section; 15

(ii) contain information on how to apply for the credit; and 16

(iii) inform the individual that the individual may ap ply to the 17
Department to have the date of the deed accepted as the date of transfer of the property for 18
purposes of the credit as provided in subsection [(d)(5)] (D)(4) of this section. 19

(5) (i) The Department shall design a document concerning the credi t 20
under this section that shall be presented to the buyer of residential property at the 21
settlement for the property by the person conducting the settlement. 22

(ii) The document under this paragraph shall include: 23

1. the following statement in conspicuous type: [“If you plan 24
to live in this home as your principal residence, you] “YOU may qualify for the homestead 25
property tax credit. The homestead property tax credit may significantly reduce the amount 26
of property taxes you owe.”; 27

2. instructions on how to apply for the credit online; and 28

3. a complete application for the credit and instructions on 29
how to submit the paper application to the Department. 30

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(iii) The Department shall make the document under this paragraph 1
available on its website where it may be easily accessed by persons conducting settlements 2
for residential property. 3

(6) The Department shall ensure that the information it provides under 4
this subsection is accurate and up–to–date. 5

(g) A homeowner who meets the requirements of this section shall be granted the 6
property tax credit under this section against the State, county, and municipal corporation 7
property tax and any property tax imposed for a bicounty commission imposed on the real 8
property of the dwelling OR WASHINGTON COUNTY ADDITIONAL RESIDENCE. 9

(i) (1) When property that has received a credit under this section for the 10
current taxable year includes improvements that are removed from the assessment roll 11
under § 10–304 of this article because of damage due to an accident or a natural disaster: 12

(i) the full benefit of the property tax abatement under § 10 –304 of 13
this article may not be diminished by the amount of the credit; 14

(ii) the full benefit of that credit may not be d iminished by the 15
property tax abatement under § 10 –304 of this article and shall be reflected in the 16
assessment of the total property, including any new improvements, for the current taxable 17
year; and 18

(iii) the property shall be eligible to receive a credit under this section 19
for the current taxable year and the two succeeding taxable years regardless of the 20
existence or condition of the dwelling OR WASHINGTON COUNTY ADDITIONAL 21
RESIDENCE. 22

(2) Neither the calculation of the abatement nor the assessment under this 23
subsection shall include an assessment less than zero. 24

(k) The tax credit under this section shall be known as the homestead property 25
tax credit. 26

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 27
1, 2026, and shall be applicable to all taxable years beginning after June 30, 2026. 28