House Bill 1410: Truth in Advertising Real-Estate Taxes

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 1410: The Truth in Advertising Real-Estate Taxes Act. This bill ensures that home sellers (and their agents) will properly list on any advertisement the property tax that the new buyer would pay.

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

You can read the actual text of the bill by clicking here.

- Saqib