An ordinance to reauthorize a tax credit used to entice residents to purchase newly constructed homes will go before the Baltimore City Council next week.
The ordinance, sponsored by Councilman Bill Henry, is scheduled to be introduced on Monday. State enabling legislation has already been introduced in the General Assembly.
The tax credit could lapse without the reauthorization ordinance, and Henry said he wasn’t taking any chances.
“I was a little uncomfortable with how the Finance Department was less than enthusiastic about renewing the historic rehab credit, and I was concerned they might be similarly short sighted [about this tax credit],” Henry said.
The Newly Constructed Dwelling Tax Credit is available on properties for which building permits were issued after Oct. 1 1994. It provides the owner a 50 percent real property tax credit in the first year after purchasing a property, and is drawn down by 10 percent a year before being eliminated, according to Baltimore Housing, the umbrella group for housing programs run by the city.
The city awarded $3.6 million in new property tax credits in fiscal 2013, and estimates it will award $3.2 million in 2014. Since the tax credit was created in 1996 the city has awarded $35.3 million in credits.
Henry said city officials have told him they want to attract a mix of new residents to meet their goal of luring 10,000 new families to the city.
He said maintaining the tax credit would be useful in achieving that goal.
“If you want to have a mix you’re going to need some newly constructed housing because there’s always going to be people who want to buy something relatively new,” Henry said.
Caron Brace, a spokeswoman for Mayor Stephanie Rawlings-Blake, said in an email that the administration supports continuing the tax credit and backs both the bill in Annapolis and the reauthorization ordinance submitted by Henry.
“We see it as a vital tool to help with the continued growth of our city,” Brace wrote in the email.