Assessment season
This is the flip side of the Homestead Credit, which caps annual property tax increases. When home prices are skyrocketing, your taxes reflect only part of that rise. But you'll be catching up with the unpaid part of the increase later when prices stagnate -- and even when they drop. (It's only when your property assessment and your tax burden equal out that your tax bill figure stays put.)
As Larry Carson reports, "a house that jumped 50 percent in value when it was reassessed in 2005, for example, would take 10 years to reach full value if the annual cap is 5 percent or less, as it is in 15 of Maryland's 24 jurisdictions." His article notes that "virtually all" of the 700,000-plus property owners recently reassessed will have a bigger tax bill this year.
Carson, property tax reporter extraordinaire, reports in another story that Baltimore City's reassessed neighborhoods saw a big increase in taxable values even as some parts of the state declined:
While appraisals were nearly flat statewide for property overall - and even dipped in the more prosperous suburbs - values for homes in the third of Baltimore that will receive the notices rose 21.4 percent since their last assessment in 2005.State assessors said home values rose 9.7 percent in eastern Baltimore County, 5 percent along the U.S. 40 corridor in Harford County, and 2 percent in the reassessed area of Carroll County. Home values dropped 4.2 percent in Anne Arundel, 7 percent in Howard and 16.3 percent in Montgomery County.
Think your reassessed value is wrong? You can appeal.
Read a How-to from the end of '07 on property tax appeals or go to the state's appeal page for information.
Looking for tax information specific to your community? Go HERE for homestead caps across Maryland and HERE for local property tax rates (as of July 1, 2008).
Categories: Homestead Property Tax Credit, Property taxes
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Comments
I just bought my first house last year and it was reassesed this year and I just got the notice (I was expecting it, I researched it last year) and of course the value went up. I was expecting that also. It's less than the sale price I paid, and I also expected that too. It also includes my tax credit application which I also expected. What I don't understand is that it says for the 2009 tax year I will be receiving the tax credit "and not paying property taxes on $0 of assessment." What does that mean? It doesn't sound good to me. Thanks for any info.
Posted by: noble | January 5, 2009 1:35 PM
Hmm -- I don't know (typo?), but I've emailed the assessments department with your question.
If I get a response, I'll post it here. Otherwise, you might want to contact the department yourself. (You can find local numbers on the website, www.dat.state.md.us)
Posted by: Jamie Smith Hopkins | January 5, 2009 1:48 PM
noble, the assessment form you got is a standard form that they put in the specifics for every single house ... i am guessing that the reason yours says you will "not be paying property taxes on $0 of assessment" is a clear indication that your assessment value is fully phased in already, while most people still have several to many more years for the current assessment value to catch up with the annual phase-ins. For the people who, for example, have a $250,000 assessment, but only have $210,000 of it reflected for the current year .... i would expect their form to say "and not paying property taxes on $40,000 of assessment" since they still have $40,000 of their assessment value to be phased in. I hope that helps.
Posted by: RalphPa | January 7, 2009 7:42 AM
That makes perfect sense, RalphPa -- thanks for taking the time to comment.
Posted by: Jamie Smith Hopkins | January 7, 2009 7:51 AM
Thanks RalphPA. If I'm understanding you correctly, then that means either my house hasn't gone up in value very much (if the assessments have caught up to it), and/or I don't have a lot of inflated (false) market value on my price tag, and the assessment was able to catch up. I suppose that's not bad. I was concerned that somehow I wasn't going to be getting the Homestead credit. Thanks!
Posted by: noble | January 7, 2009 8:55 AM
I talked to Joe Wagner with assessments and taxation, and he confirms that it means your homestead credit is $0. (That would happen if, say, you live in a jurisdiction with a 4 percent cap and your annual assessment increase was 4 percent or less.)
So you're eligible for the credit if, in the future, your assessment figure increases beyond the cap.
Wagner suggests that anyone looking for more details about assessments and homestead credits go here -- www.dat.state.md.us/sdatweb/real.html -- and look at the brochures under "Information for Homeowners."
Posted by: Jamie Smith Hopkins | January 9, 2009 3:17 PM