Town adopts homestead property tax cap

Wednesday, Dec. 2, 2009

La Plata elected officials adopted a resolution last week that gives the town authority to set a 7 percent homestead property tax rate for people who own residential property in town.

The town used to default to Charles County's 7 percent homestead property tax rate, said Daniel Mears, town manager. The homestead tax credit program, enacted in 1977, protects residential property owners from large tax increases on their primary residences when property values appreciate very rapidly, he said.

The La Plata Town Council adopted the resolution to set the tax rate at the Nov. 22 meeting at town hall.

The state has capped the rate at 10 percent, according to the Maryland Department of Assessments and Taxation. State law requires that county and municipal governments set a homestead credit percentage between 0 percent and 10 percent. With the law in place, homeowners pay no more property tax on the market value increase that is above the percentage limit.

La Plata has not taken any action to set the homestead tax rate in town since the program was enacted, Mears said. If the county were to take action to change its rate the town's would change, as well, he said.

In Maryland, the average cap is 7.6 percent, Mears said.

nmcconaty@somdnews.com