Local Property Taxes: An Overview
State Assessment Process and Local Tax Collection Explained
We have recently heard from residents who are concerned about increasing property tax bills during a difficult economy. However, please know that Calvert County’s property tax rate has not increased. In fact, the property taxes our residents pay are still being affected by the recent real estate boom. Here we hope to clarify the factors relating to local property taxes.
The Maryland Department of Assessments and Taxation assesses property values once every three years to determine the fair market value of property. This new fair market value is phased in over a three-year period. For example, properties in Calvert County’s First District — the southern part of the county — were assessed in the fall of 2005, and the result was an average fair market value increase of 71 percent from the previous assessment in the fall of 2002. The three-year phase-in for that increase would equal 23.6 percent annually. This type of market value increase was common during the real estate boom, but property value increases have slowed since then as the economy contracted. For example, when the First District was reassessed in the fall of 2008, assessments increased on average by just three percent over the fall of 2005.
Your principal residence property tax bills, however, are based on your taxable assessment. Taxable assessments are limited by a state law establishing the Homestead Property Tax Credit. The Homestead Credit helps homeowners deal with large assessment increases — and the resulting tax bills — by limiting the increase in taxable assessments in every Maryland county and municipality to 10 percent or less each year. In other words, when the First District’s fair market value assessments were increasing 23.6 percent per year, the taxable assessment increased just 10 percent due to the Homestead Credit.
Calvert County’s property tax rate, however, has remained constant since 1987. Of the state’s 24 jurisdictions (23 counties and Baltimore City), Calvert County has the ninth lowest base property tax rate at 89.2 cents per every $100 of assessed value.
Homeowners who have questions about the Homestead Tax Credit or wish to appeal a Homestead Tax Credit denial should contact the Maryland Department of Assessment and Taxation in Baltimore at 410-767-2165 or 1-866-650-8783. The Department’s Web site at www.dat.state.md.us also offers information on the property assessment process.
Families with gross household income of $60,000 or less may also qualify for tax relief under Maryland’s Homeowners’ Tax Credit. The tax credit program sets a limit on the amount of property taxes a homeowner must pay if the property taxes exceed a fixed percentage of the homeowner’s gross income. To extend the reach of the tax credit, the Board of County Commissioners has allocated funds to supplement the state program. The Homeowners’ Tax Credit is not automatically granted and each person must apply. Applications are available by calling 410-767-4433 or 1-800-944-7403. More information can be found on Maryland Department of Assessments and Taxation Web site at www.dat.state.md.us/sdatweb/htc.html.
