Maryland

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State of Maryland Property Taxes


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State Tax Summary
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Real property tax is called property tax in the state of Maryland. The state of Maryland has twenty-four counties and county equivalents, such as the city of Baltimore, with the county treasurer as the ex-officio collector in all counties. Maryland is the only state where property tax assessment is centralized at the state level http://www.msa.md.gov/msa/mdmanual/25ind/html/06assesf.html

The Maryland State Department of Assessment and Taxation http://www.msa.md.gov/msa/mdmanual/25ind/html/06assesf.html may assist local governments for compliance with the law and to ensure property tax assessments are fair. Property taxes are determined by the final tax rate as a result of budgets established to provide services, an assessor’s assessment, a county auditor’s calculations, and laws administered by the Maryland State Tax Commission. The Maryland property tax is a tax on land, buildings, structures, and other improvements attached to the land, or placed upon a foundation. Typical improvements may be a building, house or mobile home, fences, and paving. The state of Maryland has personal exemptions for homeowners, seniors, veterans, legally blind residents of Maine, and unremarried veteran widows. Other exemptions include agricultural produce, government owned property, househouse furniture, inventotires, mines, motor vehicles, nonprofit healthcare facilities, property owned by religious institutions and railroad company personal property. Property owners in Maryland have two levels of appeal: 1. after receiving the notice, appeal to the assessor within three to six months; 2. if not satisfied, then appeal to the Board of Selectment. The state agency is Maryland’s state Department of Assessment and Taxation. There are two state issued assessor’s manuals, Commercial - Marshall & Swift; Residential - Maryland State Cost Manual, (ref) both available but cost not available from State of Maryland, Department of Assessment and Taxation, Real Property Division, Room 511, 300 West Preston Street, Baltimore, Maryland 21201; (410) 225-1199; Fax (410) 333-7275. The Philadelphia ASC (Area Service Center) provides tax service for Maryland.

Contents

Assessment dates and rates

  • Assessment date: January 1
  • Fiscal year: July 1 through June 30

Taxes are collected one year in arrears. For ex, 2007 taxes are due in 2008.

  • Reassessment cycle: Four years
  • Classification of property:
    • Class I Residential. Class I assessment is 50% for real property
  • Level of government responsible for assessment: State for counties and Baltimore City
  • Economic Loss Dates: Residential property tax due dates are paid two times a year: first installment due by September 30 and second installment due by December 31. Some county and municipal tax authorities may charge a service fee for the second installment payment. This fee will cover administrative costs and lost interest income resulting from the twice yearly installment payment plan. Mortgage escrow servicers must pay property taxes in two installments unless they the mortgagor instructed to pay the tax once a year.
  • Tax Collector and Officials: The county treasurer is the ex-officio collector in all counties. County Assessors maintain and set property valuations. The County Auditor certifies property valuations. The County Treasurer collects current and delinquent property tax.

Personal Exemptions

Exemption claims must be filed to receive exemption from specially treated property.

  • Homestead Exemption

Homeowners must file a form by April 1 of the year on which taxes are based. When an application is approved, the property is reevaluated annually by the assessor. The assessor will send a notice that the property is denied an exemption when the property no longer qualifies.

  • Rebates for Resident Property tax and rent rebate

Applications for the Maryland Residents’ Property Tax Program must be filed between August 1 and December 31. This program is a property tax and rent rebate for senior citizens and Maryland residents whose income does not exceed an amount calculated by a formula. A property tax assistance program for taxpayers may be authorized by the municipal authority with the homestead. Persons 62 years and older may apply. In 2005 the total household income limits were $74,500 for a single person and $99,500 for those with a spouse or dependent. A taxpayer’s 2004 property tax must be more than 4% of the income or the rent paid must be more than 20% of the household income, to qualify for a refund. A refund of up to $2000 may get a General portion approved for any person that meets the income guidelines. Anyone 62 years of age or older in 2004 or 55 and older if disabled, and with a holusehold income not more than $12,400 for a single-member household with a dependent or $15,300 for a married person with spouse, may apply for a property tax rebate.

  • Ill or poor exemption

The state tax assessor and the municipality’s officers may abate taxes owed by persons unable to pay because they are ill or poor.

Forms

Specific deduction claim forms are available from the Maryland State Tax Commission, Silma D. Raymond, Administrator (410) 767-5757e-mail: taxcreditapp@dat.state.md.us. The Homeowners’ Tax credit program is coordinated by Pauline Russell-Stone, Supervisor (410) 767-4433 ; the Renters’ Tax credit program is coordinated by Patrice Perrin, Supervisor (410) 767-4433 The law determines the refund amount based on property tax or rent paid and total combined household income.

Commercial Exemptions

Maryland Department of Assessments and Taxation oversees the annual reassessment of business personal property, and operating property of railroads and public utilities. The Division also administers franchise taxes applicable to the net income of savings and loan associations and other financial institutions, and to the gross receipts of public service corporations http://www.msa.md.gov/msa/mdmanual/25ind/html/06assesf.html.

  • Baltimore City

Some vacant commercial buildings under development that are in the Downtown Management District may be exempt from county property tax.

  • Brown field Programs

A five year property tax credit of up to 50% of the property tax due to increased assessment of a brown field site, may receive a credit.

  • Enterprise Zone Tax Credit Program

Through this program, businesses which locate or expand facilities in a designated enterprise zone receive local tax credits on increased assessments for new capital investments and improvements. In the first five years, tax credits may be received on 80 percent of the increase. A declining percentage (from 70 percent to 30 percent) is available over the next five years.

How property tax determined

  • Residential property is assessed at 100% of phased in market value. Maryland state Department of Assessments and Taxation may use these three methods:
    • Cost Approach: at current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when the building is new, unique or no sales date for comparable properties.
    • Income Approach: for an apartment or office building, estimate how much income the property can produce, when sufficient rental market information is available.
    • Sales Approach: using other comparable properties that have sold recently, determine the most probable sales price of the subject property, when there are substantial sales.

How to prepare an Appeal and File

  • Valuation Notices : All valuations must be completed by April 1 of each year; all taxing authorities reassess as needed.
  • Appeal Procedure or Levels:

Any property owner or aggrieved taxpayer has four levels in the procedure process in Maryland. 1. Request an informal review with the local Supervisor of Assessments; 2. If not satisfied, go before the Property Tax Assessment Appeal Board and file within 30 days; 3. If not satisfied, appeal to the Maryland State Tax court 4. If not satisifed, appeal in the judicial system with legal counsel recommended ref US).

  • Appeal upon purchase

If property is purchased before July 1 but after January 1, a written appeal may be filed within 60 days of the transfer.

  • Appeal Calendar: When a property owner applies for a tax abatement, the assessor must notify in writing of his decision within 10 days after the assessor makes a decision (ref HOW). If the assessor does not give written notice within 60 days, the application has been denied. If the Local Board of Assessment does not notify of a decision in 60 days, the application has been denied (ref HOW).

Personal property tax

  • Classification of property Personal Property YES
  • Assessment rate When personal property taxes are late, the local treasurer may issue a warrant for the county sheriff to levy by distress a sale on a delinquent property.

Commercial property tax

  • Classification of property: Commercial and Industrial classes vary by municipality
  • Assessment rate: Rate varies by municipality
  • Agricultural property tax
  • Classification of property: Agricultural classification varies by municipality
  • Assessment rate: Rate varies by municipality Agricultural real estate is assessed at net earning capacity value and productivity. The assessor establishes agricultural income using prices,expenses, production and local conditions.

Additional tax bills and charges

  • Corrected bill When an error occurs, the Board of Assessors in Maryland corrects the bill after they approve the property owners’ appeals.
  • Interim bills

When a fiscal year changes, the local municipality may issue an interim property tax bill.

  • Mobile homes: Municipalities may bill for the mobile home and land together; or a municipality may bill for the mobile home and land separately. If the land is rented from a second party, two bills are issued. If one person owns the land and the mobile home, one bill is issued.
  • Escrow Service fees: Fees for mortgages or escrow service is not appropriate in Maine. The Maryland Bureau of Consumer Credit Protection may order refunds for any escrow service fees assessed in violation of Maine’s state law.
  • Penalty and Interest charges:

11% penalty on each installment missed, accrued daily from December 21 for the first installment missed and accrued daily from June 21 for the second installment missed.

  • Delinquent taxes: Delinquent balances are applied to subsequent bills. A taxpayer may apply to have late charges, interest and property taxes canceled due to undue hardship or property damaged by a casualty loss event.
  • Construction Work in Progress: Maryland statutes do not define substantial completion. When real property is revalued after improvements that add at least $50,000 to the property’s value, both the land and improvements are revalued. The final date is January 1. There may be a semiannual date or quarter date of finality for substantial completion.
  • Leased property: Leased property is taxable to the powerty owner. If part of the property is used or leased to a government or health care facility, it must be assessed separately.

Maryland Counties:

Maryland is divided into sixteen counties http://en.wikipedia.org/wiki/Maine_counties

Current Legislation and Pending Issues

Equalization

Taxable property within each county are equalized the the Maryland county board of equalization. The values are equalized among counties in Maryland by the State Board of Equalization.

Omitted Property

For Maine, within three years from the last assessment date, supplemental assessment may be made if the property is determined to be liable to taxation, but was omitted.

References





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