The following applies to owner occupied residential properties subject to the CVCBD surtax. Those are the properties whose owners are entitled to the homestead tax credit; what that means is that the effective increase in ones assessment for purposes of the Baltimore City real estate tax is limited to a maximum of 4% per year (i.e. the effective assessment may go up by a factor of 1.04 each year) compounded. The tax bill shows what the tax would be if the full assessment applied, but that tax is reduced by what the bill refers to as "City assessment credit," so that the assessment effectively has risen by only 4% over that for last year. (Incidentally, for State real estate tax purposes, the effective assessment may go up 10% per year compounded, and your bill may show a "State assessment credit.")
By now, most of us should have received our bills for the CVCBD surtax. Mine shows that the surtax is $168.77, but it shows an assessment credit of $66.94 (the homestead tax credit), for a resulting surtax (if paid in September) of $101.83. I want to thank City Council member Mary Pat Clarke for her work in getting the homestead tax credit to be applied to our CVCBD surtax. With many of us having had our assessments double or triple, her efforts have kept CVCBD much more affordable for long time homeowners in Charles Village. It turns out that the homestead tax credit should have been applied all along to the CVCBD surtax and that the City is liable for refunding any overpayment of the surtax for the last 3 years. I am told that a neighbor has received a letter from the City Finance Department indicating that the City will have a form to request the refund. Determining the refund due is actually fairly easy. Take the tax for this year for the month in which you paid last year, and divide by 1.04 to get the tax you should have been billed for in 2007. Take that figure (or the figure so calculated for the month in which you paid in 2006) and divide again by 1.04 to get the tax you should have been billed for in 2006. Repeat the process for 2005. For each year, the difference between what you should have paid and what you actually paid is the refund that you should get. In my own case, I paid the tax each year in July. The figures are as follows: My tax to be paid in July, 2008 is $100.81. In 2007, I paid $99.02 but should have paid 100.81 / 1.04 = 96.93, for an overpayment of $2.09. In 2006, I paid $94.73 but should have paid 96.93 / 1.04 = 93.20, for an overpayment of $1.53. In 2005, I paid $90.46 but should have paid 93.20 / 1.04 = 89.62, for an overpayment of $0.84. Thus, my total overpayment is $4.46. I am using the figures for payments in July, but the City may use September figures (which will be higher). In any case, this should be a good approximation of what is due. If you have the bill from a previous year for the regular City tax and the surtax, you can also calculate the overpayment from those if the bill was paid in September. Take the amount of the City homestead tax credit on the regular City tax bill (referred to as "City assessment credit" on the bill), multiply it by 0.12 (the CVCBD surtax rate), and divide the result by the City tax rate shown on the bill. The resulting figure will be the overpayment of the surtax for that year. The figures from the different methods may differ slightly because of rounding errors, but they will be fairly close. As you can probably see, the figures are fairly low. There may be exceptions to this. And the figures are likely to be much higher in the Midtown Benefits District. You can decide for yourself whether it is worth the bother to file for a refund. Joan Floyd has found case law involving a benefits district in Friendship Heights, Montgomery County, showing that the County (in our case, Baltimore City) clearly is liable for refunding any overpayment for three years where that overpayment is due to bills that were too high (in that case, because the procedures to raise the surtax rate that were set forth in the enabling law for that benefits district had not been followed, but Montgomery County had billed anyway for the higher surtax rate). Whether the City can then sue CVCBD to recover the money is not clear (especially since the error was the City's and not CVCBD's). And in cases where a property changed hands in the last three years, the situation is likely to be very different, especially if the property was reassessed right after the property changed hands. Steve. _______________________________________________ Chat mailing list Chat@charlesvillage.info http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info archive: http://www.mail-archive.com/chat@charlesvillage.info/