Another key difference: The city and counties absorb the cost of the homestead credit, whereas the state covers every dollar forgiven under the homeowners' credit.

The much larger homestead program was the subject of a recent Baltimore Sun investigation that documented how it has grown into a huge subsidy fueling inequality among homeowners, and how lax oversight has let hundreds of owners improperly receive tax breaks on multiple homes.

To Brett Theodos of the Washington-based Urban Institute, the homestead credit gives some well-off owners an unnecessary windfall. An income-based program, like the homeowners' credit, is more sound, he says.

"I don't think it's necessarily wrong to cap property taxes for people who are in a gentrifying neighborhood, where you have older homeowners who can't afford to stay as their property tax increases," Theodos said.

The rules of the homeowners' credit are straightforward: Owners qualify on their principal residence if their gross household income, before tax deductions, doesn't exceed $60,000. Their assets must be under $200,000, not counting their home or retirement savings. They must be at least a part-owner of the home and live there at least six months a year.

Big benefits for young buyers

Dr. Yolanda Chik learned of the credit from a real estate agent while house-shopping in 2007, when she began her medical residency. The agent told her the program would cut her property tax bill, allowing her to afford a $340,000 townhouse.

"I can tell you straight out I would not have been able to afford it without this program," Chik said. "It would have been much more of a hardship economically."

This year, the state covered nearly 60 percent of her $8,100 property tax bill.

When she purchased her home, she was earning "in the high 40s" and considered buying to be financially smarter than renting, given her desire to practice medicine in Baltimore after her training ended. Now a staff neurologist, she said she earns well above $60,000 a year, which means she will soon no longer qualify for the credit.

"I totally think we were not taking advantage of this program at all," said Chik, 31. "We were within the rules."

Hal Blatt said he heard about the tax break from a basketball buddy, not long after buying a rowhouse in Ridgely's Delight in 2007. He was a law student and borrowed 99 percent of his home's $305,000 purchase price, according to mortgage records.

Blatt, now 29, applied for the credit in 2008. After graduating in 2009, he says, he was unemployed for months. He landed a temporary job at the Baltimore Circuit Court and has since gotten some work at his father's Towson law firm. This year the state paid 95 percent of his $6,500 property tax bill, records show.

Kathleen McDowell bought her rowhouse in Riverside three years ago for $350,000 after borrowing the sum from her parents, mortgage records show. In each of the past two years, the state has picked up more than $4,000 of her $8,300 property tax tab.

McDowell, a 26-year-old postdoctoral student, did not respond to messages. But her father, Stewart McDowell, cheered her tax break when a reporter mentioned it.

"It would be nice for somebody in this family to be on the receiving end of a government program, instead of on the contributing end, which we've done massively in this family for 35 years," he said by phone from his home in North Carolina. "So, hooray."

The Sun's analysis also found one property owner, Canton Cove condominium resident Athena Lakis, who was receiving a homeowners' credit even though she didn't qualify, a finding confirmed by state officials.

The state has paid nearly $22,000 of Lakis' property taxes over the past four years, but records and interviews revealed that her assets exceeded the $200,000 limit, because she and her father share ownership of commercial property in Essex worth $472,000.

This month, the state requested a repayment of the homeowners' discount, said Silma Raymond, who manages the credit for the assessments agency. Athena Lakis initially qualified, but her ownership stake rose above the limit in 2007. While records in the agency's own files could have revealed this two years ago, an oversight by a staffer meant that the dots weren't connected, Raymond said.

"If they take the credit off and we're liable for the bill, we have to pay the bill," said Michael Lakis, Athena Lakis' father and a nonresident co-owner of her condo.