Montgomery County Council proposes eliminating property tax credit for homeowners | The Locally Times
Eliminating the Income Tax Offset Credit would increase annual tax bills by $692 for 200,000 households.
Montgomery County homeowners face a 12.7% increase in annual property tax bills under a budget proposal currently before the County Council. The plan, recommended by the Council's Government Operations and Fiscal Policy (GO) committee, eliminates the Income Tax Offset Credit (ITOC), a property tax reduction for owner-occupied residences. ## Tax Impact The May 1, 2026, newsletter from the Office of the County Executive states this change affects 200,000 households. For a home valued at $600,000, removing the credit adds $692 to the annual property tax bill. Commercial property owners face no changes to their tax bills under the proposed framework. ## Revenue and Income Tax Changes The Council President proposed income tax adjustments to reduce the tax burden for residents earning less than $900,000. County records show this change results in a $64.9 million revenue loss in fiscal year 2027, growing to $157.5 million by fiscal year 2028. The County Executive notes that revenue from the ITOC elimination does not cover the total losses from the proposed income tax changes by the second year of the cycle. ## Alternative Budget Proposals The County Executive’s recommended budget includes a 6.3-cent property tax increase. Analysis from the County Executive indicates this 6.3-cent increase results in a lower financial burden for homeowners with properties valued under $1,090,000 than the Council’s plan to eliminate the ITOC. The County Executive also recommended increasing the Working Families Income Supplement to assist low-income workers. The Council has not released a public rationale for prioritizing the residential property tax hike over commercial rate adjustments in the meeting record or on the council website as of May 5, 2026. ## Regional Tax Comparisons Data from the Office of the County Executive shows Montgomery County maintains the lowest commercial property tax rates in the Washington, DC, region. For residential property taxes, Montgomery County currently holds the lowest rates in the region, excluding Washington, DC. Neighboring valuation rates per $100 include $1.11 in Frederick County, $1.34 in Howard County, $1.36 in Prince George’s County, and $1.27 to $1.50 in Fairfax County. Washington, DC, rates range from $1.66 to $1.89 per $100 of valuation. ## Key Questions **How much will my property taxes change under the Council's proposal?** For a home valued at $600,000, the elimination of the Income Tax Offset Credit increases the annual property tax bill by $692, or 12.7%. **Are commercial property owners also facing tax increases?** No. The Council's proposal leaves commercial property tax bills unchanged. **What is the status of the budget vote?** The proposal is under review by the County Council. The provided records do not specify a date for the final vote.