Baltimore City Council approves property tax subclass for vacant nonprofit properties

On April 4, 2025, House Bill 1189 was introduced in the Maryland General Assembly, aiming to address the taxation of vacant and abandoned properties owned by nonprofit organizations in Baltimore City. The bill seeks to empower the Mayor and City Council of Baltimore to create a subclass of real property for nonprofit-owned properties that are no longer utilized for their intended purposes. This legislation proposes the establishment of a special property tax rate for such properties, which would typically be exempt from property taxes under existing laws.

The bill's primary objective is to mitigate the financial burden on the city caused by vacant and abandoned properties that are not contributing to the community. By allowing the imposition of a general property tax rate and a special rate on these properties, the legislation aims to encourage nonprofit organizations to either repurpose or sell their unused properties, thereby revitalizing neighborhoods and generating revenue for the city.

During discussions in the Ways and Means Committee, the bill received a favorable report with amendments, indicating support from various stakeholders. However, debates have emerged regarding the potential impact on nonprofit organizations, with some advocates expressing concerns that the new tax rates could hinder the ability of nonprofits to maintain their properties or fulfill their missions.

The implications of House Bill 1189 extend beyond fiscal considerations. Economically, the bill could lead to increased property tax revenues for Baltimore City, which may be reinvested into community services and infrastructure. Socially, it aims to address urban blight by incentivizing the productive use of vacant properties, potentially enhancing neighborhood safety and aesthetics.

As the bill progresses through the legislative process, its future remains uncertain. Experts suggest that while the intent to revitalize communities is commendable, careful consideration must be given to the balance between taxation and the operational capabilities of nonprofit organizations. The outcome of House Bill 1189 could set a precedent for how cities manage vacant properties owned by nonprofits, influencing similar legislative efforts in other jurisdictions.