Property Tax Credit and Exemption Information


Tax Expenditure Report


Note: eligibility for the majority of credits is determined by the Maryland State Department of Assessments and Taxation (SDAT). Specifically, SDAT determines whether a property is a “principal residence” (i.e., owner-occupied) which makes the property eligible for the County’s largest tax expenditures: (i) homestead credit, and (ii) local income tax offset credit. Moreover, the computation of many credits is performed by SDAT (e.g., homestead credit, homeowners property tax credit, senior credit), with only a minor portion of the credits computed by the Department of Finance, Treasury Division.


Supplemental Homeowner’s Property Tax Credit

Description

The program provides tax credits for homeowners who qualify on the basis of their household income as compared to their tax bill. The Maryland’s Homeowner’s Property Tax Credit (HOTC) program and its Montgomery County supplement are administered by the State Department of Assessments and Taxation (SDAT). The tax credits are granted to eligible homeowners of all ages. The County supplemental credit pertains only to County property taxes. Although this credit does not require a separate application, taxpayers must apply for the State HOTC to be considered for the supplemental tax credit.

Effective levy year 2005, Montgomery County greatly enhanced the program by (1) doubling the maximum property assessment amount used for computing the tax to $300,000, and (2) changing the income formula to allow for eligibility at a higher income level. Due to changes in the State HOTC credit program in levy year 2006, qualified retirement savings are now excluded from the maximum $200,000 net worth requirement (this net worth also excludes the value of the principal property).

Although, generally, applications must be made by September 1 to be applicable that tax year, for taxpayers at least 70 years of age, retroactive applications may be submitted for 3 prior years.

Authority

Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 1. STATEWIDE MANDATORY 9-104. Homeowners' tax credits

Montgomery County Code, Chapter 52, Article I, Section 52-11A

Effective Date

February 1, 1986

Contact

SDAT in Baltimore, MD at  (800) 944-7403


Senior Tax Credit

Description

The County introduced this credit in levy year 2007 for eligible residents at least 65 years of age. This credit is calculated as 50 percent of the combined State Homeowners’ Tax Credit and County Supplement. This credit, if applicable, is added to the County Supplement and reduces the taxpayer’s tax bill. The Senior credit may be based on (i) the State credit (if the County Supplement is zero), (ii) the County Supplement (if the State credit is zero), or (iii) both the State credit and County Supplement. Although this credit does not require a separate application, taxpayers must apply for the State HOTC to be considered for the senior tax credit.

Authority

Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 2. STATEWIDE OPTIONAL: § 9-245. Credit for individuals at least 65 years old

Montgomery County Code, Chapter 52, Article I, Section 52-11C

Effective Date

July 1, 2007

Contact

SDAT in Baltimore, MD at  (800) 944-7403


Homestead Property Tax Credit

Description

To assist homeowners with the fiscal impact from large assessment increases, the Homestead Property Tax Credit program limits the annual taxable assessment increase to a rate set annually by county resolution between 1% and 10%. This program is administered by the State Department of Assessments and Taxation (SDAT) and applied only to owner-occupied residential dwellings. Note: this credit is not applicable in the first year following the purchase of a new home.

The State of Maryland, Montgomery County, and municipalities in Montgomery County (with the exception of the Town of Kensington which elected 5% effective LY 2006) use a 10% homestead credit which results in any annual assessment growth in excess of 10% to become a credit. For example, if the annual phase-in of assessment growth is 25%, the homestead credit will reflect 15% while the remaining 10% is reflected in taxable assessment growth that year.

In addition to limiting annual growth in taxable assessment for homeowners, the homestead credit spreads out the assessment growth over a longer period of time resulting in a stable revenue flow. Since the cumulative credit can be significant, some taxpayers may still observe growth in taxable assessment during times of weak real estate market conditions as prior year growth is still being phased in.

Authority

Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 1. STATEWIDE MANDATORY: § 9-105. Homestead property tax credit.

Effective Date

1985

Contact

SDAT in Rockville, MD at  (240) 314-4510


Property Tax Credit – Local Income Tax Offset

Description

The County may grant, by law, a property tax credit against the county tax imposed on real property, in order to offset, in whole or in part, increases in the county income tax revenues resulting from a county income tax rate in excess of 2.6%.

This tax credit is available only to the owner of an owner occupied residential property (i.e., principal residence), as determined by SDAT. The County establishes the amount of a property tax credit under this section by Resolution.

Note: The County’s “piggyback” income tax was 60% of the Maryland income tax (effectively 3.00%) in tax year 1998, and changed to a 3.20% income tax rate based on Maryland Adjusted Gross Income (AGI) effective tax year 2004. Therefore, prior to tax year 2004, the credit could be based on income tax revenues resulting from a county “piggyback” income tax in excess of 50% of the Maryland income tax..

Authority

Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 2. STATEWIDE OPTIONAL: § 9-221. Offsets of local income tax rate increases

Effective Date

July 1, 1992

Contact

Department of Finance in Rockville, MD at  (240) 777-0311


Enterprise Zone Tax Credit

Description

This tax credit is available to businesses that locate in designated areas of downtown Silver Spring, Takoma Park/Long Branch, and Wheaton, and is designed to spur economic growth in these areas. This real property tax credit is available only for nonresidential properties located within the Enterprise Zones and is based on growth in property assessment. Under the Enterprise Zone law, personal property is not included. The “base year assessment” is the real property assessment for the year before any new construction or refurbishing is done. The credit is based on the increase in the assessment for each of the next 10 years compared to the base-year assessment. The credit itself will be given on the actual taxes that result from the increase in assessment, using the following rate schedule:

Years 1 through 5: Credit = 80% of assessment increase versus the base year

Year 6: Credit = 70%

Year 7: Credit = 60%

Year 8: Credit = 50%

Year 9: Credit = 40%

Year 10: Credit = 30% (expires thereafter)

The State of Maryland also grants a tax credit for businesses that locate in Enterprise Zones. However the State’s credit is for State income taxes and is related to the number of new employees (in the Enterprise Zone) that a business hires.

Authority

Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 1. STATEWIDE MANDATORY: § 9-103. Enterprise zones

Effective Date

1985

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Arts and Entertainment District Tax Credit

Description

This tax credit is available to a taxpayer against the County property tax imposed on a manufacturing, commercial, or industrial building that is located in an Arts and Entertainment District and is wholly or partially renovated for use by a qualifying residing artist or an arts and entertainment enterprise. This real property tax credit applies for 10 years, providing the building continues to be used by a qualifying residing artist or an arts and entertainment enterprise. The tax credit is based on growth in property assessments. The “base year assessment” is the real property assessment for the year before any renovation is done. The credit is based on the increase in the assessment for each of the next 10 years compared to the base year assessment. The credit itself will be given on the actual taxes that result from the increase in assessment. Except for properties allowed an Enterprise Zone Tax Credit, the amount of the Arts and Entertainment District Tax Credit shall be calculated as follows:

Years 1 through 5: Credit = 80% of the increase in the assessment versus the base year.

Year 6: Credit = 70%

Year 7: Credit = 60%

Year 8: Credit = 50%

Year 9: Credit = 40%

Year 10: Credit = 30% (expires thereafter)

For properties allowed an Enterprise Zone Tax Credit, the amount of the Arts and Entertainment Tax Credit is 20% as calculated above, added to the Enterprise Zone Credit.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18L

Effective Date

2002

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


New Jobs Tax Credit

Description

This program consists of the New Jobs Tax Credit and the Enhanced New Jobs Tax Credit, and benefits businesses that are planning to increase both their space and staff. A business seeking either credit must notify the County of its intent to claim the credit before the expansion.

This is a six-year credit available to businesses that increase their space by at least 5,000 square feet and their employee count by at least 25 new jobs. Businesses that are already resident in the County or that are moving from outside of Maryland are eligible to apply. The credit is not available to businesses that move to Montgomery County from another Maryland county or Baltimore City, and it is not available to retailers. The 25 new jobs must be permanent full-time positions and must last for at least 24 months. The new space must be occupied during the period the business retains the 25 new employees. The credit is based on the increase in both real and personal property tax assessments resulting from the business’s expansion. The credit decreases over six years, as follows:

Years 1 and 2: Credit = 52% of tax attributable to the assessment increase

Years 3 and 4: Credit = 39%

Years 5 and 6: Credit = 26%

New Jobs Tax Credit recipients automatically receive an additional State of Maryland tax credit, which uses the same calculation method. However, the State credit is given against one of the following taxes:

  • Corporate or personal income taxes
  • Financial institutions franchise tax
  • Insurance premiums tax

Enhanced New Jobs Tax Credit

This 12-year credit benefits large expansion projects and is available when businesses either:

1.Increase their space by at least 250,000 square feet,and either (A) create 1,250 new permanent, full-time positions or (B) create 500 new permanent, full-time positions in addition to retaining at least 2,500 existing permanent, full-time positions, OR

2.Expend at least $150 million to obtain at least 700,000 square feet of new space and employ at least 1,100 individuals, with at least 500 being in new, permanent, full-time positions.

The company must pay all these employees at least 150% of the federal minimum wage.

To qualify for the Enhanced New Jobs Tax Credit, a business must be engaged in one of the following industries:

  • Manufacturing, mining, transportation, communications, agriculture, forestry or fishing
  • Research, development, testing or biotechnology
  • Computer programming, data processing, or other computer-related services
  • Central financial, real estate, or insurance services
  • Operation of central administrative offices or a company headquarters
  • Public utility, warehousing, or business services

A business has six years from the notification date to create and fill the required number of new jobs and acquire and inhabit the new space. When this is accomplished, the business will begin receiving the credit. The Enhanced Tax Credit, like the regular New Jobs Tax Credit, is given against the local real and personal property tax and is based on the amount of additional taxes due as a result of the expansion. Unlike the regular New Jobs Tax Credit, however, the Enhanced Tax Credit is calculated at the same rate for all 12 years. The rate is 58.5% of the additional local tax liability.

The State also will give a credit based on this additional local tax liability. The State credit is 31.5% for each of the 12 years and is given against the same State taxes as the regular New Jobs Tax Credit (corporate or personal income taxes, the financial institutions franchise tax, or the insurance premiums tax). Both the regular and enhanced State tax credits allow a business to “roll” the credit for up to five years. This means that if the State tax credit is higher than the amount of taxes due in any given year, the business can claim the difference for up to five years. Both tax credits also contain a “recapture” provision that requires a business to repay the credits if they fail to maintain the job and space requirements for three years. This provision is applicable to each individual year, so that if a business maintains the requirements for 14 years, it will have to repay only the last year of the credit.

Authority

Montgomery County Code, Chapter 52, Article X

Effective Date

July 1, 1998

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Brownfield’s Property Tax Credit

Description

The County must allow a tax credit of 50% of the increased Property Tax Liability (the increase in the property tax levied on a Qualified Brownfield’s Site resulting from an increased assessment due to a voluntary cleanup or a corrective action plan for the Site), for a Qualified Brownfield’s Site, for each of the 5 tax years immediately following the first revaluation of a Qualified Brownfield’s Site after completion of a voluntary cleanup or corrective action plan.

The County must allow a credit equal to an additional 20% of the increased Property Tax Liability for a Qualified Brownfield’s Site, if the site is in an Enterprise Zone, or in a neighborhood designated by the County Council for participation in the Neighborhood Business Development Program under state law.

A recipient of the property tax credit under this article is no longer eligible if the recipient of the property tax credit withdraws from the voluntary cleanup program under  Section 7-512(A) or (B) of the Environment Article of the Maryland Code; or the Maryland Department of the Environment withdraws approval of a Response Action Plan or a Certificate of Completion under  Section 7-512(E) and (F) of the Environment Article of the Maryland Code.

Authority

Montgomery County Code, Chapter 52, Article XI

Effective Date

July 1, 1998

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Conservation Land Tax Credit

Description

Conservation land is defined as real property that is used to assist in the preservation of a natural area, used for the environmental education of the public, used to promote conservation generally, or used as a sanctuary for wildlife. Conservation land is subject to a perpetual conservation easement donated to a land trust on or after July 1, 1991; or acquired by a land trust by July 1, 1991, owned in fee by that land trust; and subject to a letter of intent, agreement, or option agreement to convey the property to a government agency. The owner of conservation land may receive a tax credit equaling 100% of any county real property tax imposed on the conservation land, not including any improvements.

Authority

Maryland Code: TAX-PROPERTY : TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 2. STATEWIDE OPTIONAL: § 9-220. Conservation lands

Montgomery County Code, Chapter 52, Article IX

Effective Date

July 1, 1991

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Historic Preservation Tax Credit

Description

This tax credit may be granted against the County real property taxes, based upon the amount expended by a taxpayer for restoration or preservation of an historic property. A property must be an historic site designated on the master plan for historic preservation, or within a historic district designated on the master plan for historic preservation.

A tax credit will be allowed only for work which is the subject of an approved historic area work permit; or for ordinary maintenance expenses, when the amount expended exceeds $1,000.00. A credit will be approved for exterior work only, and no credit shall be granted for new construction.

The amount of the credit is equal to 25% of the amount expended by the taxpayer for the restoration or preservation of an historic property, up to the amount of County real property taxes. The credit shall be allowed for the tax year immediately following the work or any portion thereof is completed, and any unused portion of this tax credit, may be carried forward for up to 5 tax years, after which the credit lapses.

Authority

Montgomery County Code, Chapter 52, Article VI

Effective Date

July 16, 2013

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Tax Credit for Property Leased by Religious Organizations

Description

This tax credit is granted against the County real property tax, for that portion of property that is leased, occupied, and used by a religious organization exclusively for public religious worship, educational purposes, or office space necessary to support or maintain public religious worship or educational purposes.

In order to be eligible for the tax credit, an application must be filed with the Montgomery County Division of Treasury, by the first day of April, preceding the tax year in which the credit is to be used.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18I

Effective Date

July 1, 1995

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Tax Credit for Day Care Provider

Description

A taxpayer may receive a tax credit against the County real property tax for an improvement on real property, if the improvement is used exclusively for day care services (registered family day care home, licensed child care center, licensed day care center for the elderly, or licensed day care center for the medically handicapped). Likewise, a taxpayer may receive a property tax credit against the County real property tax for an improvement on real property owned by a business with at least 25 employees, if the improvement is used exclusively for day care services (registered family day care home, licensed child care center).

The credit is limited to the lesser of (1) $3,000.00; or (2) the amount of the General County and Special Area taxes, attributable to the improvement.

A taxpayer must apply for the tax credit with the Montgomery County Division of Treasury by April 1, to receive the credit in the next taxable year.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18E

Effective Date

July 1, 1987

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Property Tax Credit – Fire Sprinkler Systems

Description

A taxpayer may receive a one-time real property tax credit against the General County tax for any detached single-family dwelling unit, and any attached dwelling unit or multi-family building in which a fire sprinkler system was not legally required to be installed, if an approved complete automatic sprinkler system that is used for fire protection is installed on or after July 1, 2000.

The tax credit may not exceed the lesser of (1) the total cost of installing the sprinkler system; or (2) 50% of the General County property tax attributable to the dwelling unit or building.

A taxpayer must apply for the tax credit in the year the sprinkler system is installed to receive the credit in that tax year or the following tax year.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18K

Effective Date

July 1, 2000

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Tax Credit for Spouse of Fallen Law Enforcement Officer or Rescue Worker

Description

The tax credit is 100% of the County real property tax on the dwelling of a surviving spouse (who has not remarried), of a fallen law enforcement officer or fallen rescue worker, if:

1) The dwelling was owned by the fallen law enforcement officer or fallen rescue worker at the time of their death; or if

2) The fallen law enforcement officer or rescue worker or the surviving spouse was domiciled in the State as of the date of the fallen law enforcement officer’s or rescue worker’s death, and the dwelling was acquired by the surviving spouse within 2 years of the fallen law enforcement officer’s or rescue worker’s death; or if

3) The dwelling was acquired after the surviving spouse qualified for a credit for a former dwelling under 1) or 2) above, to the extent of the previous credit.

Application for the tax credit should be submitted to the Division of Treasury by April 1, to receive the tax credit for the next taxable year.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18N

Effective Date

July 1, 2003

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Tax Credit - Home Computer Telecommuting Incentive

Description

An employer may receive an annual tax credit against the County personal property tax for the purchase of a new home computer or new laptop computer to establish a new off-site employee workstation, if the computer is purchased after December 31, 2005. The amount of the tax credit must not exceed 50% of the cost of each new computer. The aggregate tax credit allowed for a taxpayer, in any tax year, must not exceed $2,000.00.

The Department of Finance must grant each tax credit in the order in which the Department receives the applications for the credit.

The amount of credits allowed in each calendar year must not exceed:

1)$100,000 in 2006

2)$175,000 in 2007

3)$250,000 in 2008

Starting in 2009, the total amount of credits allowed in each future year, must be set by the County Council, if the Council takes no action the amount allowed for the prior year also applies to that year.

An employer is eligible for and must apply for the tax credit within 12 months after a new computer purchase, and the credit must be applied in the tax year of the purchase, or the following tax year. The employer must show that:

1) The computer will be used for telecommuting.

2) Affirm that the employee works at home at least 78 days per calendar year.

3) Document the date of purchase and the cost of the computer.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18O

Effective Date

January 1, 2006

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Property Tax Credit – Nonprofit Swim Clubs

Description

A nonprofit swim club is eligible for a real property tax credit against the general County tax and special service area taxes, provided it uses its facilities exclusively to provide a recreational outlet for a local community. In the year for which the credit is applied, the nonprofit swim club must provide the County with documentation that shows it is a nonprofit entity, and must certify to the county that its facilities are used solely for the purposes stated. The required documentation to receive the tax credit is as follows:

1) A copy of its Articles of Incorporation

2) current Certificate of Good Standing from the State of Maryland

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18P

Effective Date

2006

Contact

Department of Finance in Rockville, MD at  (240) 777-8931

Property Tax Credit – Energy Conservation Devices for Existing Energy-Efficient Buildings

 
Description
 
The intent of this property tax credit is to encourage building owners to increase the energy performance of existing buildings, incentivize building owners to reduce the energy and climate impacts of existing buildings, as the built environment generates more than half of the County’s measured community-wide greenhouse gas emissions, and advance the County’s aggressive climate goals of an 80 percent reduction in greenhouse gas emissions by 2027 and zero emissions by 2035.
 
This property tax credit is available to energy-efficient buildings that meet the following criteria:
  • A commercial or multi-family residential building in Montgomery County, MD
  • has or will have at least 10,000 square feet of gross floor area
  • has received a Certificate of Occupancy from the Department of Permitting Services
  • has achieved at least a minimum 50% occupancy rate for at least 12 consecutive months, and
  • has installed energy improvements consistent with the requirements of Montgomery County Code, Section 52-103A with demonstrated energy reductions through ENERGY STAR Portfolio Manager.
To earn this property tax credit, an existing energy-efficient building must install an eligible energy conservation device and document that the device improved energy performance against a pre-installation 12-month baseline using ENERGY STAR Portfolio Manager Data Verification Checklists.  ENERGY STAR Data Verification Checklists must be verified by an accredited building professional, which are a licensed Professional Engineer (PE) or Registered Architect (RA) that are in good standing.
 
Baseline and Improved ENERGY STAR Score 12-month time periods must not overlap, include the energy conservation device installation period, or be more than 6 calendar years apart. The Baseline and Improved ENERGY STAR Score 12-month time period must use the same ENERGY STAR score metric reference data. The Baseline ENERGY STAR Score 12-month time period must not begin earlier than August 26, 2018. Improved ENERGY STAR 12-months cannot have been issued more than 12 months before the application date.
 
To calculate the 2-year tax credit for your building, subtract the 12-month Baseline ENERGY STAR score from the Improved ENERGY STAR score, then multiply the difference by the appropriate multiplier value (determined by the Improved ENERGY STAR score tier, listed below):
 

Improved ENERGY STAR Score Tiers

Multiplier

1-24

1

25-49

1.5

50-74

2

75-100

2.5

 
 
If the building cannot achieve the ENERGY STAR score, contact the Department of Environmental Protection to discuss using the USGBC alternative compliance path for Energy Use Intensity (EUI). Requests will be considered on a case-by-case basis.
 
Once the energy performance criteria for this tax credit has been met, a building owner may seek additional credit for recognized green building certifications awarded within 12 months of the date of the tax credit application:
 

Eligible Green Building Certifications

Building Sustainability Tax Credit

LEED O+M Gold, BREEAM In-Use Excellent (or equivalent)

25%

LEED O+M Platinum, BREEAM In-Use Outstanding (or equivalent)

50%

 
Energy-efficient buildings located in MWCOG's Equity Emphasis Areas at the time of application are eligible for an additional 10% credit.
 
The combination of the three percentages (energy performance, green building certifications, and Equity Emphasis Areas location siting) equals the total property tax credit permitted. The maximum credit that may be granted in any fiscal year cannot exceed 100% of the building’s annual County property tax liability. 
 
Each building is eligible for a maximum of 3 applications – one initial application and two reapplications. The Baseline ENERGY STAR score for reapplication cannot be older than the previous application’s Baseline ENERGY STAR score; However, the reapplication baseline score can overlap with the previous application’s Improved ENERGY STAR baseline. Reapplications where the Building Sustainability Tax Credit was previously earned, the building must achieve a higher level of certification than the earlier application.
 
 
Authority
 
Montgomery County Code, Chapter 52, Article I, Section 52-103A
 
Effective Date
 
December 30, 2020

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Property Tax Credit – Newly Constructed Energy-Efficient Buildings

 
Description
 
The intent of this property tax credit is to encourage building owners to increase the energy performance of newly constructed buildings beyond current Building and Zoning Code requirements at time of application, incentivize building owners to reduce the energy and climate impacts of newly constructed buildings, as the built environment generates more than half of the County’s measured community-wide greenhouse gas emissions, and advance the County’s aggressive climate goals of an 80 percent reduction in greenhouse gas emissions by 2027 and zero emissions by 2035.
 
This property tax credit is available to newly constructed energy-efficient buildings that meet the following criteria:
  • is a commercial or multi-family residential building in Montgomery County, MD
  • has or will have at least 10,000 square feet of gross floor area
  • has a certification from the Department of Permitting Services within the last 12 months indicating the new building’s percentage performance above current Building Code requirements at time of application (minimum 10% better than Building Code)
  • has not previously received the Newly Constructed Energy-Efficient Buildings Tax Credit.
To earn this property tax credit, a newly constructed energy-efficient building must achieve 10% or greater than any mandatory energy performance requirements for building construction where the building is being built. Building Code requirement means any code, standard, zoning ordinance, or other requirement related to commercial and multi-family building construction and permitting processes that applies to a newly constructed energy-efficient building. Building owners can apply for this tax credit within 1 year of receiving a use and occupancy permit.
 
Calculate the annual County property tax credit for your building, which will be awarded for 4 years if approved. 
  • Determine your energy performance, determined by a DPS-approved modeling software.
  • Calculate how much greater your energy performance is than current Building Code requirements.
  • Use the table below to determine your new building’s tax credit amount.

% Above Applicable Code

Multiplier

Property Tax Credit

10-20%

0.5

5-10%

21-30%

1

21-30%

31-40%

1.5

46.5-60%

Above 40%

2

82-100%

 
Once the 10%+ energy performance criteria has been met, a building owner may seek additional credit for recognized green building certifications within 2 years of obtaining a use and occupancy permit.
 
To calculate the tax credit for your building, identify which of the following eligible green building certifications (or an approved equivalent certification) your building has achieved:
 

Eligible Green Building Certifications

Property Tax Credit

LEED Gold, NGBS Gold, PHIUS+/Passive House, BREEAM-NC Excellent (or equivalent)

25% for 4 years

LBC Petal Certification, LEED Platinum, NGBS Emerald, BREEAM-NC Outstanding (or equivalent)

75% for 4 years

Living Building Certification (or equivalent)

75% for 5 years

 
 
Energy-efficient buildings located in MWCOG's Equity Emphasis Areas at the time of application are eligible for an additional 10% credit.
 
The combination of the three percentages (energy performance, green building certifications, and Equity Emphasis Areas location siting) equals the total property tax credit permitted. The maximum credit that may be granted in any fiscal year cannot exceed 100% of the building’s annual County property tax liability. 
 
Building owners are only eligible for one New Building Energy Reduction Tax Credit and one New Building Energy Reduction Tax Credit. Reapplications are not permitted, even if the building has undergone extensive modifications.
 
 
Authority
 
Montgomery County Code, Chapter 52, Article I, Section 52-103B
 
Effective Date
 
January 1, 2022


Property Tax Credit – Renewable Energy (Renewable Energy Devices)

Description

Effective November 8, 2011: The Property Tax Credit for Solar and Geothermal Energy Devices has been suspended. Tax Credits will not be granted for solar or geothermal devices for any application received after November 8, 2012.

An owner of an owner-occupied residential property who installs a solar or geothermal device may receive a real property tax credit against the County tax on the property. The credit is limited to the lesser of:

1) 50% of the eligible costs of the system, or

2) $5,000 for a device to heat or cool a structure; $5,000 for a device to generate electricity in a structure; $1,500 for a device to provide hot water in a structure.

Any Geothermal or Solar energy device must meet safety and performance standards set by a nationally recognized testing laboratory for that kind of device, in order to receive the tax credit.

In order to receive the tax credit, a taxpayer must submit a completed application to the Montgomery County Department of Finance. The application must:

1) Demonstrate that the taxpayer is entitled to the tax credit

2) Include a certification from the Montgomery County Department of Permitting Services, indicating that the device is a qualifying solar or geothermal device, and has been properly installed. The Department of Permitting Services must accept a certification by another government agency, including a municipality, which certifies that the device has been properly installed.

The initial annual funding for this credit was $250,000 in levy year 2008, but increased by $150,000 on December 10, 2009 (Bill 39-09) effective levy year 2009. As a result, during any fiscal year, the total credits granted for geothermal or solar devices must not exceed $400,000. Credits must be granted in the order in which the Department of Finance receives completed applications. Any completed application received after the $400,000 limit has been reached in the current fiscal year must be granted in the next fiscal year or years based on the order in which the application is received. The amount of credit issued in any tax year must not exceed the amount of County property tax levied on the property in that tax year. Any approved credit amount not issued in that tax year may be carried over for an additional two years.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18R

Effective Date

July 1, 2008 (suspended on 11/8/2011)

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Property Tax Credit – Renewable Energy (Energy Conservation Devices)

Description

An owner of an owner-occupied residential property who installs an energy conservation device may receive a real property tax credit against the County tax on the property. In any fiscal year, the total amount of credit allowed under this section for all conservation devices is limited to $250 per property.

In order to receive the tax credit, a taxpayer must submit a completed application to the Montgomery County Department of Finance. The application must demonstrate that the device for which a credit is sought is an eligible energy conservation device, defined as a device that reduces the demands for conventional fuels, or increases the efficiency of these fuels; and that the device meets safety and performance standards set by a nationally recognized testing laboratory for that kind of device. An energy conservation device does not include a standard household appliance.

The initial annual funding for this credit was $250,000 in levy year 2008, but decreased by $150,000 on December 10, 2009 (Bill 39-09) effective levy year 2009. As a result, during any fiscal year, the total credits for energy conservation devices must not exceed $100,000. Credits must be granted in the order in which the Department of Finance receives completed applications. Any completed application received after the $100,000 limit has been reached in the current fiscal year, must be granted in the next fiscal year or years based on the order in which the application is received.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18R

Effective Date

July 1, 2008

Contact

Department of Finance in Rockville, MD at  (240) 777-8931


Residential Real Property Tax Deferral - General

Description

A taxpayer may defer payment of County property taxes due on residential real property used as the owner’s principal residence. The amount of taxes that may be deferred for any one year is the amount that County taxes due exceeds the amount of County property taxes paid in the prior taxable year. Taxes that are eligible for deferral are the General County tax and Special Service Area taxes.

A taxpayer is eligible for a deferral if:

1) The gross income or combined gross income of all individuals who actually reside in the dwelling did not exceed $120,000 for the preceding calendar year.

2)The owner, or at least one of the owners, must reside in the dwelling as their principal place of residence, and must have done so for at least 5 years.

Interest accrues on the deferred taxes at a rate set annually by the County that does not exceed the prime lending rate. The annual interest rate set by the County applies to any tax deferred that year, regardless of the year when the tax was first deferred (i.e., the new interest rate is applied to all deferred taxes). The accumulation of deferred taxes and accrued interest must not exceed 50% of the full cash value of the property.

Authority

Montgomery County Code, Chapter 52, Article I, Section 52-18F

Contact

Department of Finance in Rockville, MD at  (240) 777-8931

Effective Date

July 1, 2005


Payment in Lieu of Taxes (PILOT) Exemptions

Description

The purpose of the County Payment in Lieu of Taxes (PILOT) exemption is to support affordable housing, which is one of the County’s missions. Local governments, when authorized by State Law, negotiate agreements with rental property owners to lower the cost of County real property and special area taxes. In return, a rental property owner commits to provide affordable housing to low-income residents. Following the legal, budgetary, and procedural review of a negotiated PILOT agreement, the County Department of Housing and Community Affairs (DHCA) recommends a PILOT to the Director of Finance for approval. The Department of Finance computes the fiscal impact and, subject to the guidelines and an annual funding limit, either approves or denies the recommended PILOT. This exemption is applied to the real property tax bills once the agreement is executed. The County Council sets the maximum annual funding amount for PILOT programs for a 10-year period only for properties that are not owned or controlled by the Housing Opportunity Commission (HOC).

Authority

Maryland Code: § 7-501, § 7-502, § 7-503, § 7-505, § 7-506-1 of the Tax – Property Article; and § 1-104 of Article 44A – Housing Authorities

Montgomery County Code, Chapter 52, Article I, Section 52-18M

Contact

Montgomery County Department of Housing and Community Affairs (DHCA) in Rockville, MD at  (240) 777-3690   for PILOT related questions.

Montgomery County Treasury in Rockville, MD at  (240) 777-8936   for property tax billing related questions.

Effective Date

1979 (first County non-HOC PILOT agreement)


Property Tax Exemptions

Description

There are numerous types of Property Tax Exemptions available through the State, some of the most used ones include exemptions for: charitable or educational properties; dwelling house of blind individual, surviving spouse; dwelling house of disabled veteran, surviving spouse; government properties; and properties owned by religious organizations. A full list of available exemptions is included on the following pages.

Authority

Maryland Code: TAX-PROPERTY: TITLE 7. PROPERTY TAX EXEMPTIONS

Effective Date

Varies by Exemption


Tax Exemption List

Subtitle 2. General Property Tax Exemptions.

7-201.Cemeteries and mausoleum companies

7-202.Charitable or educational purposes

7-203.Chesapeake Bay Foundation

7-204.Religious groups or organizations

7-205.Community water systems

7-206.Continuing care facility for aged

7-207.Dwelling house of blind individual; surviving spouse

7-208.Dwelling house of disabled veteran; surviving spouse

7-209.Fire companies and rescue squads

7-210.Government property

7-211.Interest in government property

7-211.1.Property used to heat, cool, or generate electricity for State

7-212.Gunpowder youth camps

7-214.Historical societies; war memorials

7-215.Housing authority property

7-216.Izaak Walton League

7-217.Maryland Ornithological Society, Inc.

7-218.Nature Conservancy

7-219.Personal property - Agricultural products

7-220.Same - Aircraft

7-221.Same - Bank property

7-221.1.Same - Property used in processing deposits or loans

7-222.Same - Business stock property

7-223.Same - Farm implement property

7-224.Same - Livestock property

7-225.Same - Manufacturing property

7-226.Same - Raw materials and products property

7-227.Same - Property located in a residence

7-228.Same - Savings and loan property

7-229.Same - Tools of mechanics or artisans

7-230.Same - Vehicles

7-231.Same - Vessels

7-232.Same - Voting system

7-233.Scouts

7-234.Veterans' organizations

7-235.Maryland Vending Program for the Blind

7-236.Refueling equipment or machinery

7-237. Machinery or equipment used to generate electricity, steam for sale, hot or chilled water for sale

7-238.Computer software and related documentation

7-239.Certified coal pollution control facility; coal waste disposal power project

7-240. Property of nonprofit organization engaged in containment of coastal and tidal oil spills

7-241.Charles County Planning Commission

Subtitle 3. State Property Tax Exemption

7-301.Personal property - State property tax exemption

7-302.American Association of Blood Banks, Inc.

7-303.Licensed public airport on privately owned land

7-304.Land trusts

7-305.Harford Land Trust

Subtitle 4. County Exemptions - Mandatory

7-401.Rolling stock property