Although 17 percent of seniors in Baltimore live beneath the poverty line, a new tax credit will provide some extra assistance to seniors with homes who qualify. The measure, led by City Council President Bernard C. “Jack” Young, hopes to simultaneously bolster Baltimore’s real estate economy while keeping seniors living comfortably in their homes for years to come.
Official estimates reveal over 6,200 properties are thought to be eligible for the tax credit. In order to receive the credit, Baltimore residents must be of 62 years of age or older, have an annual income exceeding no more than $40 thousand, and they must have owned their residence for a time period of at least ten years.
The new tax code “will go a long way to helping them stay in their homes,” Young said.
The exact amount of the tax break received will depend on the individual’s household income, the home’s value itself, and other external factors. According to Young, a senior homeowner who makes $25 thousand a year, and who pays $1,770 a year in property taxes, would save approximately $380 that year under the new tax code.
The bill did not pass without great vocal opposition on behalf of the Department of Finance, however, led by Mayor Stephanie Rawlings-Blake. William Voorhees, the director of revenue and tax analysis, wrote that “this tax credit will create additional complexity and further delay an already complicated property tax billing process.” In addition, he believed that “the additional cost of the credit itself and the cost of the additional labor required to accommodate” the credit essentially renders it counterproductive.
Upon hearing these allegations, Young called the Department of Finance’s opposition to the bill “crazy”, and cited personal vendettas being the real reason for the delay – at the expensive of the people.
Regardless, the cost of the tax break will come to a $4 million loss in tax revenue for the city each year. Opponents to the tax credit were quick to point out that the $4 million could have settled an ongoing point of contention for budgeting after-school programs and community educational institutes in Baltimore. These debates boiled into threats of a government shutdown that fortunately never came to fruition. Instead, Young and Rawlings-Blake were able to free the necessary money to fund the youth programs and fund the tax credit without further delay.
As bumpy as the ride to the legislation had been, when the time to vote came, the Baltimore City Council approved unanimously for the low-income property tax credit for seniors. Absent from the vote was Councilman Nick J. Mosby.
When the Mayor signed the taxi credit bill into law without objection, Young expressed gratitude for her official signature.
This tax break, meant to keep Baltimore seniors from staying on the streets, comes at a time when the real estate market appears to be stabilizing – on the whole, Baltimore’s foreclosure rates appear to be improving.
RealtyTrac’s website states there are currently 5,855 homes in Baltimore that are in some stage of foreclosure. In June, the number of properties that received a foreclosure filing in Baltimore, MD was 43% higher than the previous month, but 20% lower than the same time last year. Pre-foreclosures, auctions, and bank-owned properties are all down from the prior year by 12 percent, 33 percent, and 15 percent.
Overall, the tax credit that almost shut down Baltimore City will save thousands of senior households hundreds of dollars each year. By working together, city officials have helped to ensure that low income elderly citizens will be able to retain their homes and live with more financial freedom.