Vera Artis, 61, in the kitchen of her home on Showell Court in Johnston Square Manor, where she has lived since 1984. Artis, who lives on a fixed income, may be eligible for a property tax break from the state for low and moderate-income homeowners. She was not aware of the program until recently. (Amy Davis, Baltimore Sun / February 12, 2012)

Vera Artis would seem to be a perfect fit for the state program created decades ago to ease the property tax burden on homeowners with modest incomes.

She has no major assets beyond the tidy East Baltimore townhouse that she and her husband, now deceased, bought in the 1980s. Social Security and a pension bring in just $16,000 a year. "Money," she says, "is tight."

And in fact, based on her income, the state would have picked up more than half of her $1,280 property tax bill this year — if only she had known to apply for the help.

The subsidy that Artis, 61, is missing out on is called the Homeowners' Property Tax Credit, not to be confused with the Homestead Property Tax Credit open to all homeowners regardless of wealth.

To qualify for the homeowners' credit, applicants cannot have household income over $60,000 or assets of $200,000 or more, excluding their primary residence and retirement savings. In some cases, the credit can wipe out a homeowner's entire annual property tax bill.

But an examination by The Baltimore Sun has found that thousands of lower-income homeowners in the city do not receive the credit, even though they would seem to be eligible.

And residents who do get it — legitimately — include a doctor, a lawyer and others who in recent years bought homes for $300,000 or more, in some cases with assistance from parents. One recipient of the low-income credit lives in a home valued at nearly $1 million.

The Sun also discovered that the resident of a waterfront condominium in Canton has gotten $21,700 in breaks over the past four years that were undeserved — money the state now wants back.

Del. Brian K. McHale, a South Baltimore Democrat, supports the credit and has worked to expand it to help elderly constituents on fixed incomes. But when told of The Sun's findings, he said he worried that some residents might be "taking advantage" of the program even while following the rules.

"It's an issue of fairness," he said. "When you develop a program, you obviously want to make sure it benefits the people who it's intended to benefit, not people who figured out a way to game it."

Of the roughly 10,000 city owners who get the credit, more than 700 have bought houses since 2007, and dozens just in the past year, according to The Sun's analysis — a sign that a program created to keep people from losing their homes is being used by some to help acquire one.

Young professionals and graduate students have tapped into the program soon after buying relatively pricey homes. Though the credit applies only to the first $300,000 of value, homes worth more than that still qualify.

For example, in 2007 a newly minted doctor bought a home downtown for $340,000, after a real estate agent pointed out that her modest salary as a medical resident entitled her to a break.

In another case, a graduate student bought a Riverside rowhouse for $350,000 three years ago, after borrowing money from her parents, then got the state to pay half her $8,300 annual property tax tab.

Such cases are allowed under the rules of the program, but state officials say they are exceptions: The average city recipient owns a home worth about $130,000.

Even so, a number of recipients own homes worth several times as much, The Sun found. Many are longtime, elderly owners who once might have earned large salaries but now get by on limited incomes. Some are first-time buyers.

Tax breaks for $500,000 homes

The upper tier includes 189 homes valued by the state at more than $300,000, and more than a dozen — mostly in Homeland and Roland Park — valued at more than $500,000.

The highest-valued city residence with a homeowners' credit is assessed by the state at $985,000. That owner, a retired teacher in her 80s, has lived in the sprawling North Baltimore home for decades. This year the state paid $4,550 of her tax bill.