Submitted by: Ron Brooks
Submitting Department: Finance
Agenda Section: Action
Item Title:
title
Amend City Code Chapter 108: Homeowner’s and Homestead Property Tax Credit Programs
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Suggested Action:
recommendation
I move the Mayor and Council direct the City Attorney to draft an ordinance amending City Code Chapter 108-2 and 108-3 as follows:
Section 108-2: Homestead Property Tax Credit Program
•Amend the effective date to July 1, 2025
•Reduce the taxable assessment cap down from 110% to 106%.
Section 108-3: Local supplement to the state homeowners property tax credit
•Assessed Value Limit - increase to $415,000.
•Combined Net Worth Limit - increase to $400,000.
•Combine Gross Income Limit - increase to $90,000.
The proposed updates must be provided to the State Department of Assessment and Taxation before or on March 25, 2025, to take effect this property tax billing cycle.
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Summary Background:
In 2008, the Hyattsville City Council passed Ordinance 2008-07, which established the “Local Supplement to the State Homeowner’s Property Tax Credit”. This local tax credit, intended for low- and fixed- income homeowners, created a local tax credit valued at 15% of the State Homeowner’s Property Tax Credit for principal residences that have a maximum of $350,000 in assessed value, if the household income is less than $80,000 and the net worth of the household, excluding the principal residence, is less than $200,000. In addition, this ordinance set the local Homestead Tax Credit percentage at 110%.
Housing affordability continues to be a hardship for many Hyattsville residents. While Ordinance 2008-07 was intended to reduce the property tax burden for low- and fixed-income homeowners, it is unclear how effective it has been.
These proposed recommendations as identified in each property tax program will increase the number of homeowners that participate and provide a larger tax credit for property owners that qualify especially low-and fixed income property owners.
Next Steps:
The City Attorney will draft an ordinance for introduction and first reading at the March 17th, 2025, Council meeting. Second reading and passage expected on March 24, 2025.
Fiscal Impact:
If passed, the changes in both property tax credit programs will reduce Real Property Tax Revenues estimated, between $550k to $750k on an annual basis.
City Administrator Comments:
The City can support this program for our eligible residents
Community Engagement:
Community Information and Outreach
Strategic Goals:
Goal 2 - Ensure the Long-Term Economic Viability of the City
Legal Review Required?
Pending