House Bill 109: Residential Property Tax Disclaimer Act (Last Updated 2/17/2010))

I introduced this bill in 2009 as House Bill 233: The Full Disclosure of Real-Estate Taxes. I have re-introduced it in 2010. Below is my write-up from last year, with contemporaneous updates.

In Maryland we have something called the "Homestead Property Tax Credit". This tax credit ensures that the annual increase in your home property sales taxes is capped at a certain amount - regardless of how high your home's value rises. In Montgomery County it is 10%.

The effect of this tax credit is that even though your home's value may have increased dramatically, your property taxes climb much slower. When the house is sold, the new buyer doesn't get the benefit of this tax reduction. He or she will pay the full tax rate. So often buyers will end up paying significantly higher taxes than the sellers were paying.

Many people don't understand or realize this "tax-gap" exists. Sellers often advertise the taxes they pay on the real-estate fliers leaving the buyer with "sticker-shock" after they move in and get their first tax bill.

Montgomery County Councilman Phil Andrews identified this problem and passed a local ordinance to fix it in 2007. I'm seeking to take Councilman Andrews idea and expand it state-wide.

For this reason, I have introduced House Bill 233: Full Disclosure of Real-Estate Taxes Act. This bill ensures that home buyers will receive a disclaimer well before their settlement date that their property taxes might be significantly higher than those that the seller was paying.

You can read Councilman Andrews' excellent letter to the editor in the Washington Post about this issue by clicking here.

- Saqib

UPDATE 2/26/2009: This bill just passed the Maryland House of Delegates unanimously 135-0. Now onto the Senate!

UPDATE 4/15/2009: The 2009 legislative session ended and the Senate unfortunately took no action on this bill. I'll have to re-introduce it again next year and hope for better results.

UPDATE 1/15/2010: I have re-introduced this bill as House Bill 109: Residential Property Tax Disclaimer Act. You can read the actual text of the bill by clicking here. Hopefully it will fare better this year.

UPDATE 2/17/2010: Good News! The House Environmental Matters Committee passed this bill 22-0. Click here for a roll call of the votes. Now onto the full House...

UPDATE 2/23/2010: Good News! The Full House of Delegates passed this bill 137-0. Click here for a roll call of the votes. Now onto the Senate Budget & Tax Committee...