Baltimore Homeowners' Tax Credit and Homestead Credit 2026–27: Income Limits, the City Supplement for Seniors and How to Apply
Baltimore homeowners have two state-run credits that do completely different jobs. The Homestead Tax Credit caps how fast your taxable assessment can rise, no matter what you earn. The Homeowners' Property Tax Credit (often called the "circuit breaker") caps your tax bill based on your income. Many Baltimore owners who qualify for one have never filed for the other, and older owners in the city may also be eligible for a City supplement that goes further than the state credit.
This guide answers the questions owners ask most, using the Maryland Department of Assessments and Taxation (SDAT) 2026 application and program pages, and the Baltimore City Code.
What Is the Difference Between the Two Credits?
Homestead Tax Credit (assessment cap). SDAT explains that state law limits the increase in taxable assessments on a principal residence each year to a fixed percentage. Every county and municipality must cap increases at 10% or less. It is not a cap on market value; it is a credit for the tax on any assessment increase above the cap. SDAT's example: if your assessment goes from $100,000 to a phased-in $120,000, a 10% cap allows $110,000. The credit covers the tax on the $10,000 difference. At a rate of $1.04 per $100, that is a $104 credit.
Homeowners' Property Tax Credit (income-based). SDAT describes this as a credit for homeowners of all ages, based on gross household income, applied when property taxes exceed a fixed percentage of income. In short, it puts a limit on property taxes relative to what you earn.
Homestead Tax Credit | Homeowners' Property Tax Credit | |
What it does | Limits yearly growth in taxable assessment | Limits property tax compared with income |
Income test | None | Combined gross household income of $60,000 or less |
Asset test | None | Net worth $200,000 or less (excluding the home and retirement accounts) |
How often you apply | Once while you own the home | Every year |
2026 deadline | No annual deadline | October 1, 2026 |
Who runs it | SDAT | SDAT (including the Baltimore City supplement) |
What Is Baltimore's Homestead Cap?
Local governments can set a cap lower than 10%. The Baltimore City Code, § 10-1, as amended by Ordinance 26-129, sets the homestead credit percentage for the City property tax at 105% for the taxable year beginning July 1, 2027. In other words, taxable assessment growth on City taxes for that year is capped at 5%.
That followed a 2026 proposal. In a City news release, the mayor's office described the City's cap as 4%, in place since the 1990s, and proposed raising it to 6%. The same release proposed expanding the Targeted Homeowners Tax Credit to lower the effective homeowner rate from $2.048 to $1.99 per $100 of assessed value. Check your own bill and assessment notice for the cap and credits that apply to your account in any given year.
Do I Have to Apply for the Homestead Credit?
Yes, once. Since a 2007 law, every homeowner must file a one-time application to establish eligibility. It exists to stop the credit from going to rented properties or to more than one property owned by the same person.
To check whether you are already covered:
Look up your property on SDAT's Real Property search.
Scroll to the bottom of the property page for "Homestead Application Status."
"Approved" or "Application Received" means you are done. "No Application" means you need to file.
To file:
Online: through Maryland OneStop. Browse by State Agencies, choose Department of Assessments and Taxation, and select "Homestead Tax Credit Eligibility Application." SDAT says no access code is needed.
By mail: download the paper application and mail it to the Department of Assessments and Taxation, Homestead Tax Credit Division, 700 East Pratt Street, 2nd Floor, Suite 2700, Baltimore, MD 21202.
By fax: 410-225-9344.
Note that the credit only shows up in years your assessment rises faster than the cap. Not seeing it on a bill does not mean you lost approval.
Who Qualifies for the Homeowners' Property Tax Credit?
According to SDAT's 2026 HTC-1 application, you must meet four legal requirements:
Principal residence. You live there, or expect to, for more than six months of the tax year, including July 1, 2026. Exceptions apply for illness, need for special care, or a recent purchase. You can claim only one principal residence.
Legal interest. You must have a legal interest in the property. Land installment sales, contract purchases, life estates and beneficiaries of certain trusts count.
Net worth of $200,000 or less as of December 31, 2025, excluding the home itself and the cash value of IRAs and qualified retirement plans.
Combined gross household income of $60,000 or less.
If you meet all four, your credit is figured on calendar-year 2025 gross household income. The tax eligible for credit is calculated on the lesser of $300,000 or your total assessment minus any Homestead Credit. The credit does not cover fixed charges such as water, sewer or improvement repayments, or taxes on excess land or business use.
"Gross household income" is broad. The HTC-1 asks for wages, interest and dividends (taxable and non-taxable), capital gains, net rental and business income, unemployment, workers' compensation, Social Security and SSI, pensions, annuities, IRA distributions, gifts over $300, expenses others paid for you, inheritances, and other money received. Income from other adults in the home who are not your spouse or dependent is also reported.
What Is the Baltimore City Supplement?
Under Baltimore City Code § 10-20, the City adds a supplement to the state credit for older, long-time owners. As of the end of the calendar year before the tax year, the homeowner must:
be at least 62 years old;
have lived in the home for at least 10 years; and
have a combined income of less than $40,000.
The home must also be eligible for the state program. The City code sets the supplement at the total real property tax on the home, minus the state credit, minus a share of combined income: 0% of the first $12,000, 3% of the next $4,000, 7% of the next $4,000, and 9% of income over $20,000.
You do not file a separate City form. The HTC-1 says county and Baltimore City supplemental credits are administered by the state program, and the single HTC-1 form is all you submit. It also notes that some applicants may get a supplement even if they are not eligible for a state credit based on income.
What Do I Need to Send?
The HTC-1 says "do NOT send originals." Include copies of:
your complete 2025 federal income tax return with all schedules and forms (and your spouse's, if you filed separately), if you filed one;
Form SSA-1099 for Social Security;
proof of SSI benefits;
the Railroad Retirement verification or rate letter, if any;
proof of any rollover if you report pensions, annuities or IRAs;
W-2 statements for deferred compensation;
a copy of AIMS if you report public assistance grants.
You will also need your property account number from your tax bill or assessment notice. Baltimore City residents must give the ward, section, block and lot.
When Is the Deadline, and When Will I See the Credit?
Filing deadline: October 1, 2026.
If SDAT receives a properly completed application by April 15, 2026, and it is not audited, the credit appears on the July 1, 2026 bill.
If you file after April 15, SDAT advises you to pay the July bill to get any early-payment discount; if you qualify, you will get a refund.
"Properly completed" means every question answered, the form signed, every required document included, and prompt answers to any follow-up from SDAT. Missing paperwork is the most common way to slip past the July bill.
How Do I Apply?
Online (fastest): taxcredits.sdat.maryland.gov, which SDAT says also gives status updates.
By mail: Department of Assessments and Taxation, Homeowners' Tax Credit Program, P.O. Box 49005, Baltimore, MD 21297.
Questions: 410-767-4433 in the Baltimore area, 1-800-944-7403 toll-free, or sdat.homeowners@maryland.gov.
What If I'm Denied?
The HTC-1 says every applicant gets one of three outcomes: a credit on the July bill, a refund if the bill was already paid, or a written denial stating the reason. Use that reason to decide your next step:
Over income or net worth: check what you counted. Net worth excludes the home and retirement accounts. If you are 62 or older with 10 years in the home, ask whether the City supplement still applies.
Missing documents: send them quickly. Applications are not complete until SDAT's follow-up questions are answered.
Residency questions: if you will not live in the home on July 1 and for six months after, the form asks you to explain (illness or special care are listed exceptions).
Homestead status shows "No Application": file the one-time homestead application; it is separate from the HTC-1.
You disagree with the assessment itself: SDAT has a separate real property assessment appeal process.
Renting Instead?
SDAT runs a Renters' Tax Credit Program modeled on the homeowners' credit, on the idea that renters pay property tax indirectly through rent. The 2026 window for both programs ran to October 1. If you rent in Baltimore, check its requirements on SDAT's tax credit page.
More Help
Related Guides
Sources
This guide gives general information, not tax or legal advice. Credit rules and local caps change; confirm with SDAT and Baltimore City before you rely on a figure.
Comments