The City Council gave final approval Monday to a plan to offer up to $5,000 in tax credits to homeowners who move to new homes but choose to remain in the city.
The Resident Retention Tax Credits — which will were approved unanimously by the council — are intended to help residents who lose their Homestead tax credits when they switch homes.
The program was pushed at the state level by Del. Maggie McIntosh, a Baltimore Democrat. Her bill allowed city homeowners to transfer a portion of the Homestead tax credit from their old building to a new property. State Sen. Bill Ferguson sponsored the Senate version of the bill.
The Rawlings-Blake administration altered the General Assembly's proposal, because the state plan was "extremely complex," city finance officials said. Instead, the city allocated $3 million — which will cover about 750 credits — for the program. They will be awarded on a first-come, first-served basis.
Residents will receive a $1,000 tax credit in the program's first year, followed by credits of $900, $800, $700 and $600. Homeowners who buy in poorer areas could be eligible to earn an additional $200 in credits per year.
The average Homestead property tax credit per year in Baltimore is currently $860.
The tax credit program will begin in 2015. The city's property tax rate is double that of surrounding counties.