Apparently, due to some formula I'm not familiar with, nor want to be
familiar with, I am NOT eligible for the 2012 MD homeowners' tax credit
program.
Judy Berlin
On 07/06/2012 12:02 PM, Stephen J Gewirtz wrote:
On your real estate tax bill, if you are eligible for the homestead
tax credit, there will be a "SPECIAL CREDIT." If you have looked at
the Sun or at the City announcement of the credit (and that is what I
essentially repeated in my earlier email about our coming real estate
tax bills), you would think that the credit was 0.02% of your
effective assessment. However, that is not the case. And it took two
of us on the phone over an hour to figure out how the credit actually
is calculated. I could see that my credit was bigger than described
earlier, but I assumed incorrectly that the City had erred on my tax
bill.
I checked the City Council legislation, and the credit is a percentage
of the assessed value of the improvements on your house, with the
percentage to be set each year by the Board of Estimates. This year,
it is 0.03% of the assessed value of the improvements. The assessment
for land is not part of the calculation, and the amount of your
homestead tax credit is not part of the calculation.
If you go to this website, http://sdatcert3.resiusa.org/rp_rewrite/ ,
you can look up your assessment. It is given as an assessment for
land, an assessment for improvements, and a total assessment. The
"SPECIAL CREDIT" is simply the assessment for improvements multiplied
by 0.0003 (0.03%).
For example, my assessment is land $90,000 and improvements $88,600,
with a total of $178,600. My State tax is 0.112% of $178,600, i.e.
$200.03. My City tax is 2.268% of $178,600, i.e. $4,050.65. From
these, the State and City homestead tax credits are subtracted (and
the result should be that your State tax should be 10% more than last
year, and your City tax should be 4% more than last year). This is
because the effective assessment (the assessment that you are actually
paying taxes on) can go up no more than 10% for State tax purposes and
4% for City tax purposes. That is the effect of the homestead tax
credit. If you have owned your house for a long time, your homestead
tax credit will probably reduce your actual tax very substantially.
This year, we have the additional "SPECIAL CREDIT," which is 0.03% of
the assessed value of the improvements on your property. In my case,
this number is 0.03% of $88,600, i.e. $26.58.
So what the City announced and what appeared in the Sun and what I
repeated do not accurately describe the "SPECIAL CREDIT." In fairness
to the City, they announced that it would be "approximately" 0.02% of
the total assessment. But it is actually as I have described it.
BTW, let me remind everyone to make sure that you have filed the
application for the homestead tax credit if you are eligible for it,
i.e. if you own your house and it is your principal residence and if
your spouse does not claim the credit on a different house. This
year, if you have gotten the homestead tax before, you will get it
again. But if you have not applied for the credit by the end of this
calendar year, you will lose it and the "SPECIAL CREDIT" for next year
and for succeeding years. When you look up your assessment, it will
say on the bottom of the page whether you have been approved for the
homestead tax credit. If you have not, go to
https://sdathtc.resiusa.org/homestead/
to file the application online.
Steve
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