Baltimore lawmakers weigh 5% homestead tax cap for homeowners

Baltimore homeowners could see smaller bills under a compromise that would cap the city’s homestead property tax credit at 5% instead of the 6% Mayor Brandon Scott first proposed. The change would apply to owner-occupants, not renters or investors, and city leaders are pitching it as a way to blunt the strain of rising assessments without cutting too deeply into revenue.

The practical benefit is straightforward. Baltimore’s real property tax rate for fiscal 2025 is $2.248 per $100 of assessed value, and the city says Scott’s broader affordability plan would lower the effective homeowner tax rate from $2.048 to $1.99 per $100 for residents receiving the targeted credits. That 5.8-cent difference works out to about $58 a year for every $100,000 of assessed value, or about $174 on a $300,000 home, once the change takes effect.

Council leaders have been negotiating the middle ground around a 5% cap as Baltimore City Council President Zeke Cohen pushes for a version he considers more fiscally responsible. The city said the homestead-credit legislation was to be introduced at the Feb. 9, 2026, council meeting for implementation in fiscal 2027, which means homeowners should not expect an immediate reduction in their bills even if the measure clears the council.

The stakes are larger than one tax line. Scott has tied the homestead credit change to a broader effort to push Baltimore’s residential property tax rate below $2 per $100 of assessed value, and Council Vice President Sharon Green Middleton has said the goal is to bring the rate to its lowest level in 50 years. City leaders have also said Baltimore’s property taxes are roughly double those in many surrounding counties, a gap that has become a central argument in the fight to keep longtime homeowners from being priced out of the city.

The package does not stop at the homestead credit. Scott’s February 9 affordability plan also included changes to the tax-sale process, among them raising the minimum bid to assessed value and creating payment plans for residents in danger of tax sale. Baltimore officials said the city reached an agreement with Maryland Legal Aid to pause a federal lawsuit over tax-sale practices for two years while those changes are put in place. The city has also moved to expand enrollment in state Homeowners’ and Renters’ Tax Credit programs, signaling that the relief effort is meant to reach beyond a single credit and into the broader problem of housing affordability in Baltimore.