To receive an exemption for the taxable year, the property must be owned by the organization prior to the beginning of the tax year (July 1) for which the exemption is sought. The organization owning the property prior to the taxable year may apply for the exemption up to September 1 following the beginning of the taxable year for which the exemption is sought (see Tax-Property Article 7-104). However, the granting of the exemption must be based upon actual and exclusive use tests as described below.

Every applicant seeking either a charitable, educational or religious exemption pursuant to Section 7-202 and Section 7-204 of the Tax-Property Article must meet two fundamental requirements. First, there is an "ownership" test whereby the property on which the exemption is sought must be owned by the applicant charitable, educational or religious organization. Segroves v. Supervisor of Assmts., 51 Md. App. 489, 444 A.2d 1042 (1982). The exception to the titled ownership requirement involves a 99-year or perpetually renewable lease which, nevertheless, is the legal equivalent to ownership under Section 6-102 of the Tax-Property Article.

Second, the property must be "actually used" and "exclusively for" the exempt purposes. The terms "actually used" and "exclusively for" have been the subject of a significant amount of judicial review and interpretation. A religious or charitable organization which begins construction of a new building structure is entitled to exemption in the current taxable year if the building permit has been issued as of July 1, and assuming that the exemption application filing deadline of September 1, has been met. Montgomery County v. Meany, 34 Md. App. 647, 368 A.2d 1107 (1977). However, vacant land is not entitled to the exemption despite attempts by religious and other organizations to establish temporary uses of the property such as for tent revivals, open prayer services or congregation picnics and athletic programs. Such temporary uses have been held by the Maryland courts as failing to meet the legal requirements of "actually using" the property to the full extent required by the statutorily specified exempt purposes. Bullis School, Inc. v. Appeal Tax Court, 207 Md. 272, 114 A.2d 41 (1955). See also 66 Op. Att'y Gen. 3 (September 21, 1981). Thus, the earliest stage at which "actual" use can begin is with the commencement of construction of permanent structures or the renovation of existing improvements intended to carry out the exempt purposes. Once an exemption is granted on the basis of the issuance of a building permit, the applicant organization must make "continual progress" in the building of the permanent improvements, or the exemption may be withdrawn at a later date. Meany, supra.

The "exclusively for" language in the statutory "use" test resulted in a judicial standard for granting exemptions which requires that the property must be used primarily for only certain specified purposes. For example, the Court of Appeals held in Supervisor of Assessments v. Trustees of Bosley Methodist Church Graveyard, 293 Md. 208, 443 A.2d 91 (1982) that caretakers' houses intended to protect churches and graveyards from vandals and to maintain the building and grounds are not being used "exclusively for the statutorily stated purpose of public religious worship" and therefore, are fully taxable.