A.A. Public Safety Officers Now Eligible For $2,500 Property Tax Credit

Are you a HOMEOWNER who is also an Anne Arundel County Police Officer, Firefighter, Deputy Sheriff or Correctional Officer?

If so, read on – YOU may be eligible to save a lot of money on your property taxes!

If not, you should still read on – someone you know may be eligible to save a lot of money on their property taxes (and you’ll be doing them quite the favor by letting them know!)

In 2017, the Anne Arundel County Council voted 5-2 to approve a bill which will make resident public safety officers eligible to receive a $2,500 credit on their annual property taxes.  You have questions? We have the answers!

So Am I Eligible?

• You must be a police officer, firefighter, EMT, deputy sheriff, or correctional officer who has been employed by an Anne Arundel County Public Safety Department for at least one year
  • Volunteer firefighters are eligible if they have earned at least 50 service points
• You must own a home in Anne Arundel County which you use as your principal residence

What do I Have to do to Receive the Credit?

• You will have to submit an application to the State Department of Assessments and Taxation (SDAT) by April 1st, 2022
  • SDAT will need some time to develop the application
• Your application will make you eligible to receive the tax credit for one tax year (July 1st, 2022 – June 30th, 2023)
  • You can renew your application for the credit for four additional taxable years, for a maximum of five taxable years of benefit

How the Heck Will I Receive This $2,500??

• Your total County property tax liability will be reduced by $2,500 (if your County property taxes are less than $2,500, then they will be reduced to zero but no more…)
• If you own your home mortgage free, then you are the one who writes your property tax check to Anne Arundel County each tax year
  • Your total taxes will be $2,500 less than they would be without the credit, so this is when you will realize your savings
• If you have a mortgage on your home, then your mortgage company receives the property tax bill every year and pays the County out of your escrow account. (What’s an escrow account?? You pay into your escrow account every month.  With each mortgage payment you make, a portion is set aside so there is enough money in the account to pay your property taxes when they are due)
  • Since your mortgage company will be paying the County $2,500 less than they were expecting to, this will leave a SURPLUS in your escrow account which they are required to refund to you.  So each year, for five years, you should receive a check from your mortgage company around property tax time (July 1), refunding you the extra $2,500 they did not need to pay the County.
  • Alternatively, your mortgage servicer may choose to reduce your monthly escrow payment to avoid the annual surplus.  You may want to inquire with your current mortgage servicer to ask what you should expect.

How Will This Affect Home Buyers?

• If you take your $2,500 annual savings and spread it out over 12 months, that puts an extra $208.33 in your pocket every month
• If you are presently comfortable with an $1,800/mo mortgage payment, then once you consider your annual savings spread out over 12 months, you might now feel comfortable with a $2,000/mo mortgage payment
• On average this will increase your buying power by about $40,000!

Does This Mean I Will Qualify for $40,000 More if I Get Pre-Qualified With a Mortgage Lender?

• Unfortunately, no. Since the $2,500 comes in the form of a tax credit which you must apply for each year, mortgage underwriters will still consider you liable to pay the tax.  For example, if you forget to apply for the tax credit by April 1st, you won’t receive it.  Or if your employment as a public safety officer terminates, then so will the tax credit.  Furthermore, since you can only take advantage of this tax credit for five tax years, your savings is not forever…
  • BUT…there is a difference between “qualified” and “comfort level”. Many of the home buyers I work with get pre-qualified for significantly more than they are comfortable spending.  So we shop in their comfort zone.  With the benefit of this tax credit, many home shoppers’ comfort zones will increase dramatically

I Have a Question You Didn’t Answer!

• WHAT?! IMPOSSIBLE!
  • Just kidding – send us an email, give us a call, or even just text us! We would be happy to explain things in more detail or tell you how the credit will affect you personally.