[Chat] [Discussion] Special City tax credit--a correction

[judy]

Apparently, due to some formula I'm not familiar with, nor want to be 
familiar with, I am NOT eligible for the 2012 MD homeowners' tax credit 
program.

Judy Berlin


On 07/06/2012 12:02 PM, Stephen J Gewirtz wrote:
> On your real estate tax bill, if you are eligible for the homestead 
> tax credit, there will be a "SPECIAL CREDIT."  If you have looked at 
> the Sun or at the City announcement of the credit (and that is what I 
> essentially repeated in my earlier email about our coming real estate 
> tax bills), you would think that the credit was 0.02% of your 
> effective assessment.  However, that is not the case.  And it took two 
> of us on the phone over an hour to figure out how the credit actually 
> is calculated.  I could see that my credit was bigger than described 
> earlier, but I assumed incorrectly that the City had erred on my tax 
> bill.
>
> I checked the City Council legislation, and the credit is a percentage 
> of the assessed value of the improvements on your house, with the 
> percentage to be set each year by the Board of Estimates.  This year, 
> it is 0.03% of the assessed value of the improvements.  The assessment 
> for land is not part of the calculation, and the amount of your 
> homestead tax credit is not part of the calculation.
>
> If you go to this website, http://sdatcert3.resiusa.org/rp_rewrite/ , 
> you can look up your assessment.  It is given as an assessment for 
> land, an assessment for improvements, and a total assessment.  The 
> "SPECIAL CREDIT" is simply the assessment for improvements multiplied 
> by 0.0003 (0.03%).
>
> For example, my assessment is land $90,000 and improvements $88,600, 
> with a total of $178,600.  My State tax is 0.112% of $178,600, i.e. 
> $200.03.  My City tax is 2.268% of $178,600, i.e. $4,050.65.  From 
> these, the State and City homestead tax credits are subtracted (and 
> the result should be that your State tax should be 10% more than last 
> year, and your City tax should be 4% more than last year).  This is 
> because the effective assessment (the assessment that you are actually 
> paying taxes on) can go up no more than 10% for State tax purposes and 
> 4% for City tax purposes.  That is the effect of the homestead tax 
> credit.  If you have owned your house for a long time, your homestead 
> tax credit will probably reduce your actual tax very substantially.
>
> This year, we have the additional "SPECIAL CREDIT," which is 0.03% of 
> the assessed value of the improvements on your property.  In my case, 
> this number is 0.03% of $88,600, i.e. $26.58.
>
> So what the City announced and what appeared in the Sun and what I 
> repeated do not accurately describe the "SPECIAL CREDIT."  In fairness 
> to the City, they announced that it would be "approximately" 0.02% of 
> the total assessment.  But it is actually as I have described it.
>
> BTW, let me remind everyone to make sure that you have filed the 
> application for the homestead tax credit if you are eligible for it, 
> i.e. if you own your house and it is your principal residence and if 
> your spouse does not claim the credit on a different house.  This 
> year, if you have gotten the homestead tax before, you will get it 
> again.  But if you have not applied for the credit by the end of this 
> calendar year, you will lose it and the "SPECIAL CREDIT" for next year 
> and for succeeding years.  When you look up your assessment, it will 
> say on the bottom of the page whether you have been approved for the 
> homestead tax credit.  If you have not, go to
> https://sdathtc.resiusa.org/homestead/
> to file the application online.
>
> Steve
>
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