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Ball proposes property tax credit for green residences

Tax credit already exists for green commercial buildings

By Lindsey McPherson, lmcpherson@patuxent.com

2:59 PM EDT, October 31, 2011

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County Council chairman Calvin Ball plans to introduce a bill in November to give a property tax credit to new residences that achieve certain green building standards.

Under Ball's proposal, the property tax credit would be given to new apartment buildings, townhouses or single family homes that achieve at least a silver rating under the U.S. Green Building Council's Leadership in Energy and Environmental Design rating system.

"I think it's a great opportunity to increase green technology and innovation, and not only spur economic development but environmental sustainability," Ball, a Columbia Democrat, said.

Ball prefiled the bill, which is being co-sponsored by councilwoman Courtney Watson, an Ellicott City Democrat, Thursday, Oct. 27. The council will officially introduce the bill at its Nov. 7 legislative session. A public hearing is scheduled for Nov. 21 and a vote expected in early December.

If approved, the credit, which is given as a percentage of the total county property tax assessed on the residence, will only be given to the property owner for four years. The credit starts at 100 percent for the first year, and then decreases each year following — 75 percent in the second year, 50 percent in the third year and 25 percent in the fourth year.

The bill has a five-year sunset provision. The tax credits would start in fiscal year 2013, which begins July 1, 2012, and terminate after fiscal year 2017, which ends June 30, 2017.

"That will give us enough time to re-evaluate and ensure the intent and the goals (of the bill) are being met," Ball said, noting that hopefully the economic climate will have improved in five years.

Michael Harrison, director of government affairs for the Homebuilders Association of Maryland, said builders support the idea behind the bill.

"It creates enthusiasm for green building and helps get the word out," he said. "It's something that other counties (including Anne Arundel and Baltimore counties) have done that seems to work well."

However, Harrison noted, the LEED certification process can costs a few thousand dollars, which discourages some builders from getting certified, even if their homes would meet the requirements.

"It's an expense that they don't want to incur and the homeowner doesn't want to pay for," he said. "So a tax credit could make up that difference."

The county currently gives property tax credits to commercial buildings that achieve at least a LEED silver rating, or a comparable rating according to county or state green building standards.

Only five buildings — three with LEED gold ratings and two with LEED silver ratings — have received tax credits under that program since it started in 2008. The total amount the county has given to those buildings through the tax credits is $553,499.

New commercial buildings are authorized to receive the tax credit for five straight years — 25 percent for LEED certified silver, 50 percent for LEED certified gold and 75 percent LEED certified platinum.

Existing commercial buildings are eligible to receive the tax credit for three straight years — 10 percent for LEED certified silver, 25 percent for LEED certified gold and 50 percent LEED certified platinum.

With both the commercial tax credits and the residential tax credits, a change in ownership does not result in a lapse of the credit.