Avoiding the excise tax on new home construction became more difficult for Calvert County residents this week.
The county commissioners tentatively approved standards that would eliminate one device used by some residents to avoid the tax: building a new home on the site of an abandoned, and often dilapidated, structure.
County commissioners raised the excise tax sharply last year, from $3,950 to $12,950 for each new single-family detached home. The goal of the tax was to pay for new county services and infrastructure needed by residents moving into the fast-growing county.
But the law includes an exemption for residents who replace their old homes with new ones on the same property, on the theory that they aren't increasing the county population. Officials said some were bending the spirit of the law -- building new homes atop the structures of abandoned houses, and claiming an exemption even though new residents were occupying the sites.
Under the new standards, dwellings must be habitable to qualify for the exemption. County officials said they hope the new guidelines will limit land speculation.
The changes endorsed Tuesday include language that defines what constitutes a "dwelling."
To qualify as a dwelling, the existing structure must meet new standards drawn from the county's Minimum Livability Code passed in 1988. It must have a well-maintained exterior, strong supporting structures free of deterioration, a sound roof and exterior walls in good repair to keep out pests and water.
"To avoid paying the excise tax, it must be a sound structure," said Greg Bowen, the county's deputy planning director.
Commissioner Linda L. Kelley worried Tuesday that land speculation would continue with only these standards identified.
"Someone could buy up [the old building], put up a new house and not pay the excise tax," she said. "They've been calling it remodeling in order to avoid the excise tax."
So the commissioners adopted a sixth standard: If the state tax rolls value a structure at $1,000 -- meaning that the state sees the building as uninhabitable and worth only the value of its wood -- then the owner cannot claim a tax exemption when building another structure.
"If they say it's $1,000, it has no value . . . only reclaimed wood," Bowen said.
Until a public hearing can be held and a final vote taken to adopt the standards, they will serve as county guidelines, Bowen said Tuesday.
But the requirements will not include plumbing or electricity as a requirement.
"Not all houses that are occupied have plumbing," Bowen said. "So if somebody wants to upgrade their home by replacing it and doesn't have plumbing in it, I think it's reasonable to waive the excise tax."