What is the homestead exemption in Maryland and how do I claim it?

Maryland uniquely caps assessment growth via the Homestead Property Tax Credit rather than reducing assessed value.

1. Two Concepts

Maryland has (a) the Homestead Property Tax Credit administered by the State Department of Assessments and Taxation (SDAT) and (b) a bankruptcy/creditor homestead under Md. Cts. & Jud. Proc. § 11-504(f).

2. Creditor / Bankruptcy Homestead

§ 11-504(f) protects $25,000 of equity in an owner-occupied residence in bankruptcy. There is no separate state homestead for non-bankruptcy creditors — tenancy by the entirety is the primary out-of-bankruptcy protection.

3. Automatic vs Declaration

The bankruptcy exemption auto-attaches; the Homestead Property Tax Credit requires a one-time SDAT application.

4. Federal Bankruptcy Cap

Maryland opted out of federal exemptions (§ 11-504(g)). BAPCPA § 522(p)'s $189,050 cap rarely applies.

5. Property-Tax Homestead

The Homestead Property Tax Credit (Md. Tax-Property § 9-105) caps annual taxable-assessment growth at 10% statewide; counties and Baltimore City have set lower caps (Baltimore City 4%, Montgomery 10%, Anne Arundel 2%). The Renters' Property Tax Credit and the Homeowners' Property Tax Credit (§ 9-104) help low-income homeowners.

6. Filing Property-Tax Exemption

File the one-time Homestead Tax Credit application with SDAT (paper or online). Once approved, it applies as long as you occupy the home.

7. Spousal Protections

Tenancy by the entirety protects marital homes from individual-spouse judgments under Maryland common law.

8. Loss Triggers

Selling, moving, or converting the home to rental terminates the Homestead Tax Credit. Divorce ends entireties protection.

9. Foreclosure & Forced Sale Exceptions

Purchase-money deeds of trust, property taxes, mechanic's liens, federal liens, and joint judgments override homestead and entireties protections.

This is legal information, not legal advice.