MARYLAND STATE DEPARTMENT OF ASSESSMENTS & TAXATION

JANUARY 1, 2007 REASSESSMENTS

2007 Press Release

Table R-1: Average Annual Reassessments & County Assessment Caps

Table R-2: Historical Full Cash Value Before Phase-In

Table R-3: Full Cash Value Before Phase-In

Table R-4: Residential & Commercial Base Change

Number of Appeals Graph (in pdf)

Percentage of Accounts Appealed Graph (in pdf)

Average Assessment Increase 1986-2007 Graph (in pdf)



Reassessments Index

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  State of Maryland  
ROBERT L. EHRLICH, JR.
Governor

C. JOHN SULLIVAN, JR.
Director

WAYNE M. SKINNER
Deputy Director

Department of Assessments and Taxation

Office of the Director
December 29, 2006  

ASSESSMENT NOTICES REFLECT
INCREASE IN MARKET SINCE 2003

Assessment notices mailed today to 661,000 property owners across the State reflect the growth in real estate values since these properties were revalued in 2003. Over the past three years, property values have increased statewide by an average of 56.1% in the reassessed areas. This equates to an average annual increase of 18.7% for each of the next three years. The reassessment increase this year is 11.9% lower than the 2005 increase for residential properties.

Property owners are receiving a redesigned assessment notice. Eligible residential property owners will receive a Homestead Tax Credit which limits the increase in their taxable assessments despite the increase in the market value of the property shown on the notice. The taxable assessment, as reduced by the homestead credit, is listed at the top of their notice inside of red boxes. This reduced taxable assessment lessens the impact of rising property values and assessments for homeowner occupied properties.

The Homestead Tax Credit is a State law which mandates that all taxable assessment increases for homeowner occupied properties cannot increase by more than 10 percent per year. Baltimore City and each of the 23 counties are authorized to determine a lower percentage of allowable increase in taxable assessment for their eligible homeowners. The taxable assessment increases are limited to 8 percent per year in Cecil County; 7 percent per year in Carroll and Charles Counties; 5 percent per year in Caroline, Dorchester, Frederick, Garrett, Howard, Kent, Queen Anne’s, St. Mary’s and Washington Counties; and 4 percent per year in Baltimore City and Baltimore and Prince George’s Counties. Worcester County limits the increase in taxable assessments to 3 percent per year and Anne Arundel County limits the increase in taxable assessments to 2 percent per year. Talbot County continues to cap all taxable assessment increases for homeowners.

In Maryland, properties are reassessed, by law, once every three years. Properties are required to be assessed at their current market value so that each property owner pays only their fair share of local property taxes. The properties being reassessed were last revalued for the 2004 tax year. The new assessments are based upon the examination of more than 132,500 sales which have occurred in the reassessment area over the past three years. Emphasis has been placed on sales which occurred in 2005 and the first half of 2006. Any increase in property value is phased-in equally over the next three years.


While property values have increased over the last three years, the percentage increase for residential properties was greater than for commercial properties in all counties except Somerset and Worcester. The largest percentage increase in assessed values will be in St. Mary’s County followed by Prince George’s and Somerset Counties. The northern end of St. Mary’s County was reassessed. This area is serving as a bedroom community for the Washington, D.C. area. In Prince George’s County, the Hyattsville – College Park area inside the Washington beltway and the area in the southern portion of the county around Accokeek and Piscataway to the Charles County line was reassessed. New homes are being constructed throughout this southern area of the county while long established neighborhoods inside the beltway have seen significant sales price increases in recent years. Somerset County’s increase is fueled by the demand for waterfront properties throughout the bay region.

All segments of the real estate market have experience increasing values since 2003. Some of the largest increases across the State were for properties valued at less than $250,000.

The commercial market continues to be strong but has not increased as rapidly as residential real estate. Statewide, the commercial increase is 39.6% compared to 59.4% for residential properties over the three year period. The commercial assessment increase is 5.9% higher than last year’s increase. Statewide, rental rates continue to increase while vacancy rates remain stable.

The assessment only partially determines a property owner’s tax bill. Ultimately, next July’s tax bill will be calculated with the tax rates which local governments will set in the spring. As part of the budgetary process, the property tax rates are established by the spending needs of each local government. Local governments may offset assessment increases by lowering their tax rates to the “constant yield” tax rate level. The constant yield tax rate provides local governments with a stable level of property taxes from one year to the next.

For further information, contact the State Department of Assessments and Taxation at 410-767-4881. Extensive reassessment data and information is available from the Department’s website at www.dat.state.md.us.