12 Percent Assessment Cap Credit

What conditions must be met to receive the 12 Percent Assessment Cap Credit?
The Assessment Cap Credit will be granted if the following conditions are met during the previous real property tax year:

• The property was not sold or transferred to a new owner;
• The dwelling is the owner's principal residence (an owner can receive a credit only on one property - the principal residence);
• There was no change in the zoning classification requested by the owner, which resulted in an increased value of the property;
• The previous assessment was not clearly erroneous;
• There was no significant construction or rehabilitation to the property that caused at least a 10 percent increase in the value of the improvements.

Scenario One: Prior Homestead Deduction Filed

1. Multiply your prior year's assessment cap value by 1.12. This yields the new capped assessment for this year.
2. Next, subtract your Homestead Deduction amount from your current assessed value, yielding the net assessment for this year.
3. Next, subtract the new capped assessment calculated in step one from the net assessment calculated in step two. If the result is a positive number, this yields the amount of assessed value from which the actual credit is calculated on you bill.
4. To calculate the dollar amount of the credit, first divide the result in step three by 100, and then multiply the result by the tax rate of $0.96. This amount is your credit.

Step	Action	Result
One	Determine Prior Capped Assessment	$888,340
	Multiplied by 12% Cap	1.12
	Equals Current Capped Assessment	$994,941
Two	Current Full Value Assessment	$1,364,680
	Less Homestead Deduction	$38,000
	Equals Assessment Net of Homestead Deduction	$1,326,680
Three	Assessment Net of Homestead Deduction	$1,326,680
	Less Current Capped Assessment	$994,941
	Equals Assessed Value of Cap Credit	$331,739
Four	Assessed Value of Cap Credit	$331,739
	Multiplied by Effective Tax Rate ($0.96/100 = $0.0096)	$3,184.69
Result	Gross Taxes on Assessment of $1,364,680	$13,100.92
	Less $38,000 Homestead Deduction	$364.80
	Less Cap Credit	$3,184.69
	Equals Total Net Taxes for Year	$9,551.43

Scenario Two: First-Time Homestead Deduction Filer

1. Subtract prior year's Homestead Deduction from the prior year's assessment. This yields your prior assessment subject to the cap.
2. Multiply the result in step one by 1.12. This yields the capped assessment for this year.
3. Next, subtract your current year's Homestead Deduction amount from your current assessed value, yielding the net assessment for this year.
4. Next, subtract the capped assessment calculated in step two from the net assessment calculated in step three. If the result is a positive number, this yields the amount of assessed value from which the actual credit is calculated on you bill.
5. To calculate the dollar amount of the credit, first divide the result in step three by 100, and then multiply the result by the tax rate of $0.96. This amount is the credit.

Step	Action	Result
One	Prior Year's Assessment	$918,340
	Less Prior Year's Homestead Deduction	$30,000
	Equals Prior Assessment Net of Homestead Deduction	$888,340
Two	Prior Assessment Net of Homestead Deduction	$888,340
	Multiplied by 12% Cap	1.12
	Equals Current Capped Assessment	$994,941
Three	Current Full Value Assessment	$1,364,680
	Less Homestead Deduction	$38,000
	Equals Assessment Net of Homestead	$1,326,680
Four	Assessment Net of Homestead	$1,326,680
	Less Current Capped Assessment	$994,941
	Equals Assessed Value of Cap Credit	$331,739
Five	Assessed Value of Cap Credit	$331,739
	Multiplied by Effective Tax Rate ($0.96/100 = $0.0096)	$3,184.69
Result	Gross Taxes on Assessment of $1,364,680	$13,100.92
	Less $38,000 Homestead Deduction	$364.80
	Less Cap Credit	$3,184.69
	Equals Total Net Taxes for Year	$9,551.43

Where is the 12 Percent Assessment Cap Credit shown?
The Assessment Cap Credit will be granted as a credit when your property tax bill is calculated. Therefore, the tax amount that is reflected on your real property tax bill already includes the credit. If you are receiving the Assessment Tax Credit, a message at the bottom of the bill will show the calculation of the credit. The credit will automatically be granted to you if you are eligible. No application is required.

This credit is not shown on the Assessment Notice, but the credit is shown on your real property tax bill for the applicable year. An example of this portion of a tax bill is shown below.

*YOUR PROPERTY IS RECEIVING AN ASSESSMENT CREDIT (12% CAP) AND THE HOMESTEAD DEDUCTION. THEREFORE, YOUR REAL PROPERTY TAX HAS BEEN REDUCED BY $3,184.69. IT IS A CREDIT APPLIED AGAINST THE TAX DUE ON THE PORTION OF THE ASSESSMENT EXCEEDING 12% FROM THE PRIOR YEAR. THE CREDIT IS CALCUALATED AS: (((1,364,680-38,000)-994,941 CAPPED ASSESSMENT)/100*0.96=$3,184.69)