As of October 1, 2024, a new law, House Bill 54 (HB 54), has come into effect that impacts how property taxes can be managed, particularly for homeowners and heirs inheriting property in Maryland. This law introduces important provisions for installment payment plans for property taxes and offers relief for heirs or legatees inheriting homes. Here’s what you need to know:
What is HB 54?
HB 54 requires the Maryland State Tax Sale Ombudsman to create an installment payment program for homeowners to manage their property taxes. The new program allows homeowners to pay their property taxes in advance, make current payments, or catch up on taxes in arrears. This flexibility can be a financial lifeline for many, especially those struggling to keep up with payments.
Furthermore, HB 54 gives counties and municipalities the option to create their own installment payment programs specifically for taxes in arrears. This means local governments can now offer homeowners a way to pay overdue taxes over time rather than all at once, which could prevent homes from going to tax sale.
Key Benefits for Heirs and Legatees
One of the most important changes under HB 54 is the exemption it provides for property transfers from an estate to heirs or legatees. Before this law, all property taxes had to be paid in full before a home could be transferred from a deceased person’s estate. Now, heirs and legatees can enter into a payment plan, allowing them to assume the property without having to pay all outstanding taxes upfront. This can ease the financial burden for families dealing with inheritance and estate settlements.
How Does the Installment Payment Program Work?
The installment payment program offers flexibility for homeowners. Whether you want to make advance payments or catch up on taxes in arrears, this program provides an option to do so without fear of immediate penalties or tax sales. However, homeowners with a mortgage or deed of trust that includes escrow payments are not eligible for the advance payment option.
If a homeowner enters an installment plan and follows the payment schedule, local tax collectors are prohibited from taking further action, such as initiating a tax sale. This program can serve as a financial safety net for those at risk of losing their homes due to unpaid taxes.
Local Government Flexibility
In addition to the statewide installment payment program, local governments can now establish their own programs for taxes in arrears. These programs will give even more flexibility to homeowners in different counties or municipalities, making it easier for them to avoid tax sales and stay in their homes.
Why This Matters
For homeowners facing financial difficulties, this law provides relief by allowing more flexible options for paying property taxes. For heirs and legatees, HB 54 reduces the financial stress of inheriting property, especially when there are outstanding property taxes. This law is designed to help families stay in their homes and avoid the harsh consequences of tax sales.
If you have any questions or need assistance navigating the new changes under HB 54, feel free to reach out. My name is Kenneth Powell, and I specialize in helping homeowners, heirs, and investors manage real estate transactions smoothly and efficiently. You can contact me at (240) 237-7855 or via email at [email protected] for more information.