What is the difference between Maryland (prince George) property tax on a home (around $300K) if it is residential versus non-residential?
We are planning to have my mother come live with us and wondering how would this change in her residential effect her property tax. Thanks!
I take it you are planning to convert her current residence to a rental property.
As you no doubt know, Maryland provides property tax credits to homeowners at both the state and local levels. The circuit-breaker credit, which is probably the most significant at the low end of the income scale, is the total amount of property tax assessed minus a percentage of the homeowner's gross income. The subtraction is 9% of gross income over $16,000, plus smaller percentages of the first $16,000. Counties and cities can provide an additional supplement to the circuit-breaker credit; a glance at the Prince George's County web site suggests that county has not done so. It appears your mother may not qualify for this credit; it is allowed only to homeowners whose combined net worth is $200,000 or less on December 31 of the preceding calendar year, or who has $60,000 or less of gross income. If the house is worth $300K, she is probably disqualified for the circuit breaker credit on the basis of her net worth (unless she has a large mortgage against it).
There is also a credit to offset increased property taxes arising from the reassessment of residential property, known as the homestead credit or assessment cap.
To the extent that your mother currently benefits from these credits, they would terminate when the house is converted to a rental. I would suggest you look at her latest tax bill, or get a copy of it from the county Office of Finance. That should show the gross assessment and the credits your mother is currently receiving.
Katie in San Diego
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