Commercial Broker Quarterly: Q1 2009 - GWCAR - Greater Washington Commercial Association of REALTORS

CBQ >> Commercial Broker Quarterly: Q1 2009

Maryland General Assembly

The 2009 Maryland General Assembly session is moving right along at full speed. Here is an update on how some of the local legislative bills are doing in the Montgomery County Delegation:

MC 906-09 Montgomery County - Property Tax - Classes of Property and Special Rates
GREAT NEWS!! MC 906-09 is dead for 2009!! The bill received an unfavorable report by the County Affairs committee as well as an unfavorable report by the Montgomery County delegation. So no further action will be taken on it this year. If passed, it would have essentially authorized Montgomery County to impose different rates for different classes of property, otherwise known as the "split rates" law, meaning split property tax rates. Today, under Maryland law a county must have one property tax rate for all classes of real property: residential, commercial, industrial and agricultural. Most other states allow for split rates meaning separate property tax rates for each class. Naturally, the lowest rate will apply to residential and the highest to business real property. Hence, a major shift in the property tax burden away from the homeowner to business.
However, Maryland, unlike most other states, already has a way to shift the property tax burden away from the homeowner to all other property. It is called the Homestead Tax Credit Program, which essentially is assessment caps on the rate of growth from year to year, but it only applies to owner occupied residential properties. Understandably, this is a huge benefit for homeowners and an important credit. GWCAR was very concerned that if MC 906-09 was passed it would drastically hurt commercial real estate and the business community as a whole. From a good business economic approach, legislators should be looking at keeping the economy healthy here and keeping business in Montgomery County as well as promoting homeownership. Businesses also have many other taxes they need to pay that homeowners do not on top of their property taxes. GWCAR adamantly opposed the legislation and worked with several other commercial real estate groups and business groups to defeat the legislation.

To get a full update on the various bills that the Maryland Association of REALTORS^® is reviewing please visit www.mdrealtor.org and go to the government affairs links.