(July 10, 2020) Below is a summary of the 2020 legislative session of the Maryland General Assembly on items that were passed and put into legislation affecting the real estate industry as it relates to affordable housing and taxes.
These bills were effective as of June 1 or July 1.
HB 257/SB 417 – Property Tax – Credit for Disabled Veterans – Enables local county and municipal governments to grant tax credits against property taxes for disabled veterans and their spouses.
The tax credit can be granted for a 50 percent disability.
HB 566/SB 713 – Opportunity Zone Enhancement Program – Eligibility – Lead-Based Paint Affected Properties– Clarifies that applicants for Opportunity Zone Property Tax Credits must ensure the property complies with the State Lead Poisoning Prevention Program.
HB 759 – Historic Revitalization Tax Credit – Expansion – Rehabilitations of Common Elements of Condominiums and Cooperative Projects – Authorizes condominiums and cooperatives to apply for the small commercial project historic tax credits if the project involves the common elements of structure.
HB 862/SB 978 – Historic Revitalization Tax Credit – Transferability (Historic Revitalization Tax Credit Improvement Act of 2020) – Authorizes the Historic Revitalization Tax Credit to be transferred to a third party involved in the transaction like a bank or other investor.
Transferability helps monetize the credit thereby increasing the pool of potential investors for projects.
HB 980/SB 775 – Income Tax – Energy Storage Tax Credit – Alterations – Authorizes a tax credit for residential and commercial property owners against the costs of installing an energy storage system.
The credit may not exceed $5,000 for residential applicants and $150,000 for commercial applicants. Total credit amounts may not exceed $750,000 annually.
HB 1076 – Homestead Property Tax Credit – Date of Transfer of Dwelling – Clarifies that a deed recorded after the start of Maryland’s new fiscal year (July 1) may use the date of transfer of the property (between Jan. 1-July 1) to ensure the homeowner’s homestead tax credit is not delayed an additional year.
HB 1200 – Property Tax – Credit to Offset Increases in Local Income Tax Revenues – Eligibility – Clarifies that the property tax credit which offsets income tax increases is available only for principal homes receiving the Homestead Tax Credit.
SB 48 – Property Tax – Homeowners’ and Renters’ Property Tax Credits – Deadlines – Extends from Sept. 1 to Oct. 1 the amount of time available to apply for the Renters or Homeowners tax credit (not the Homestead Exemption) and requires the State Department of Assessments and Taxation (SDAT) to make available the Homeowner’s tax credit application by Feb. 15.
SB 523 – Income Tax – Pass-Through Entities and Corporations – Authorizes small businesses to use pass-through entities to avoid the credit and deduction limitations placed on individuals under the federal tax reform legislation, including the $10,000 cap on the deduction for state and local property taxes.
– Lauren Bunting is a licensed Associate Broker with Atlantic Shores Sotheby’s International Realty in Ocean City.