Property assessments and taxation have historically been confusing issues for property owners. This information is intended as an easy to use source of information regarding how your property is valued, what to do if you think your property value is in error, and what special tax relief programs are available. Included are the answers to the most commonly asked questions about real property assessments.
The SDAT staff is always available to answer your questions. Please contact your local assessment office for more detailed information.
An assessment is an estimate of the current market value of your property as determined by the Department of Assessments and Taxation. Local governments will apply their tax rates to the assessment in determining your annual property tax bill.
The new market value of which you are being notified is the estimate of the market value based on a cost and sales comparison analysis. Very simply stated the cost approach is the estimated value of the land plus an estimate of the cost to rebuild the structures (less depreciation). The sales approach is an estimate of value based on recent sales of comparable properties.
The figures on the assessment notice are to advise property owners of their old and new market values and possible credits. Reading the notice narrative can help you better understand the assessment process. A more detailed explanation is available by contacting your local assessment office and obtaining helpful brochures published by the Department, or by accessing our web site at www.dat.state.md.us under Real Property.
The sales listing is the listing of all sales used for the valuation of individual properties. The information on the sales listing identifies and describes the sale properties.
Comparable properties are recently sold properties that are similar to the property being appraised. The closer they resemble a property, the more the sale price represents the value of the unsold property.
The increase in your assessment from the old market value to the new market value is equally divided over three years. The phase-in is designed to spread your property value increase over the next three years so that the full increase will not be subject to taxes in one year. This is not a projection of the market value of the property at a future date.
Property is reassessed every 3 years so each property owner pays their appropriate share of local taxes. Property values rise and fall over time. Reassessment is necessary to reflect the current market value of property.
The Homeowners' Tax Credit Program is a State property tax relief program that allows a property tax credit to households whose total gross income is below a standard set by law. This program provides property tax credits for homeowners of all ages depending on their incomes. In addition to the State's program, local governments can now supplement the amount subsidized by the State.
Each county and municipality is required to limit taxable assessment increases to 10% or less over the prior year's taxable assessment. The lower the percentage set by a local government, the greater the savings to the property owner. If, for example a county sets a 4% assessment cap, the local tax bill will increase by no more than 4% over the previous year's tax bill if the county uses the same tax rate. If the county uses the Constant Yield Tax Rate, your tax bill will be even less.
The Homestead Property Tax Credit, commonly referred to as the Assessment Cap, is a program for homeowners who qualify that limits the taxation of large annual assessment increases on a property owner's principal residence. For State tax purposes any annual assessment increase for a home or homesite that is greater than 10% is not taxed. Counties and municipalities may limit assessment increases for local tax purposes to less than 10% annually.
The State Department of Assessments and Taxation (SDAT) is required by law to establish a Constant Yield Tax Rate for each county and local jurisdiction. This is an important consumer protection tool for notifying homeowners when jurisdictions decide to raise more revenue.
As property values rise, total tax revenues increase if counties choose to adopt a tax rate that exceeds the Constant Yield Tax Rate. Any increase in revenue that is generated by adopting a real property tax rate that is higher than the Constant Yield Tax Rate is a tax increase, even if the adopted tax rate is the same as the previous year's tax rate.
While SDAT assesses the value of your property, the jurisdiction determines how much tax you will pay.
*Example:* The total taxable assessment for Kent County was $3,000,000,000 on 7/1/2020. The tax rate was $1.022 per $100 of assessed value resulting in real property tax revenue for Kent County of $30,660,000.
Kent County decided to maintain the current tax rate and not adopt the Constant Yield. The total taxable assessment for Kent County was $4,000,000,000 on 7/1/2021. Maintaining the current tax rate generated $40,880,000 which is a tax increase of $10,220,000 in new tax revenue.
If Kent County decided to adopt the Constant Yield Tax Rate, it would have maintained the current tax revenue of $30,660,000.
Your tax bill is based on the spending needs of your local county or municipal government. An increase in the assessment does not necessarily cause an increase in taxes. Your tax bill is a direct result of your local subdivision's budgetary needs.
The Department of Assessments and Taxation appraises property as a service to local governments. The Department is not involved with the establishment of local tax rates upon which the tax bill is calculated. Therefore, your questions concerning taxes must be directed to your local officials.
Owners may appeal the total new market value within 45 days from the date on the notice. The decision to appeal should be based upon whether the Total Market Value (the value of the land and building together as a whole) reflects the market value of the property. For your convenience, your appeal may be submitted in writing, discussed in a telephone hearing, or in a personal hearing with an assessor.
There is an appeal form included with your assessment notice that explains the appeals process. Instructions are included to help you complete the form.
The hearings at the first level (Supervisor's level) are informal. An assessor will verify property data and explain the basis of the assessment. It is an opportunity for the property owner to identify errors in the assessment or provide additional information regarding the property.
The value of your house may increase due to inflation and other normal factors that impact the real estate market. Your property is valued every three years. The new market value reflects the changes in the real estate market from the time it was last valued.
Yes, if you are not satisfied with the decision made as a result of the Supervisor's hearing, you may appeal further to the Property Tax Assessment Appeal Board and then to the Maryland Tax Court. Both are separate and independent agencies from the Department of Assessments and Taxation.
The current valuation reflects the changes in the real estate market since you purchased the property. Sales that have taken place in the last three years indicate that the market value of your property has increased.
The Department constantly monitors the market statewide. All sale transactions are processed through the local assessment offices as deeds are recorded. Each property's sale price is compared to its assessment. The Department reduces assessments if a downward trend occurs.
An appraisal made for fire insurance purposes does not include the land.
Land is valued based on the market or comparative sales approach and the allocation approach. Sale properties are analyzed and compared. Units of comparison such as square feet, acreage and front foot are used to develop land value from the sale properties. These land values are then applied to non-sale properties based on their comparability.
Market conditions are reflected in the land values. When valuing building lots, small building lot size does not usually indicate a significant difference in the lot value. Factors such as location and topography can affect the land value.
When valuing property all economic and physical factors affecting value are analyzed. The land rates and improvement values reflect the various individual differences in properties. Waterfront land rates normally differ depending on many factors such as water depth and location.
The land value attributed to an individual condominium is based on the principle of allocation. A percentage of the total value is assigned to the land.
SDAT Real Property Division conducts property assessments; provides assessment roll information; and maintains our records based on the official records recorded among Land Records.
The Maryland Department of Planning (MDP), Planning Data and Research Unit, is responsible for maintaining tax maps for the 23 counties in Maryland. Tax Maps are meant to provide a graphic representation of real property by reflecting individual property boundaries in relationship to contiguous real property.
The maps provided by MDP are NOT to be construed or used as a "legal description." It is not a survey product and not to be used for the design, modification, or construction of improvements to real property or for flood plain determination. MDP does not provide an guaranty of accuracy or completeness regarding the map information. Any errors should be reported to the Maryland Department of Planning, Planning Data and Research Unit, (410)767-4500, 301 W. Preston Street, Baltimore, MD 21201.
Tax Property Article 2-211(b)(1) requires that the owner of a tax account be shown on our Department's records. Our records reflect the ownership of property listed within the deeds that are officially recorded among the County's Land Records. Our Department cannot control how third party website searches reflect the address information of an individual or obtain the information they use for their online searches.
If you would like your name to be concealed with the property that you reside at for our records and still be qualified as your principle residence for homestead credits, you could create a trust and list yourself and others as the beneficiaries. A new deed would then need to be recorded in Land Records with your property transferred into that trust. You would need to consult with an attorney for more information on how to go about this process.