The Montgomery County tax rate is .915, not .699. Also, since 2005, Montgomery County has been issuing a flat credit (in addition to the homestead credit) to all principal residences. The amount of the flat credit varies each year and there is no assurance that the flat credit will be issued next year, but as as example, the amount of the flat credit in 2010 was $692; in 2009 it was $690, and in 2008 it was $579.

Adding to my previous comment, the .915 rate is for areas of Montgomery County that are outside municipalities. That rate includes the countywide parks tax, metro tax, and various other taxes. So, while the .699 might be the base rate for Montgomery County, no one -- including those who live outside municipalities -- pays that base rate.

Montgomery County has an online calculator for estimating taxes in the first year of ownership for buyers of real property. The calculator removes the homestead credit and factors in the "add-ons", such as municipal tax, parks tax, metro tax, state property tax, and so forth. It can be accessed at:

http://www.montgomerycountymd.gov/apps/OCP/Tax/index.asp

Anyone know if other counties have a similar online calculator?

I'm glad you noticed that, Louis. I relied on the state's listing of tax rates here -- http://www.dat.state.md.us/sdatweb/taxrate.html -- which has Montgomery's rate as 0.699. Not a very useful listing after all! I'm never going to track down each of the 24 jurisdictions' tax departments, but I will chat with the Montgomery folks for clarification.

Thanks!

The full Montgomery County property tax rate schedule is here:

http://www.montgomerycountymd.gov/content/finance/CountyTaxes/InfoTaxes/10RealPropertyTaxRates.pdf

You have to look on your property tax bill to determine your "tax class", such as R42.

When you consider the 3-year phase-in for assessments, the homestead credit, the flat credit, the homeowners credit, and the dozens of rate classes in Montgomery County (and presumably, in the other counties and in Baltimore City), Maryland likely has the most complex property tax system in the USA.

Montgomery's is sure a LOT more complicated than any of the jurisdictions in the Baltimore area, as far as I know. (Even the city only has a few special taxing districts.) I've been trying to talk to someone in Montgomery for an explanation, but I've been transferred several times already.

If you're buying in Montgomery, use that calculator!

Jamie,

Your advice to multiply the tax assessment by the tax rate is sound for the purposes of loan qualification and estimating your initial payment, but it's unsound for longterm budget planning.

For longterm budget planning on a perspective home purchase you should multiply the purchase price times the tax rate. The property will be re-assessed to the most recent purchase price.

The assessors don't always reassess properties to their purchase price -- sale prices of similar properties play a role, too -- but that's a good point, Josh.

While they're often not the exact sales price,they're usually pretty close, and much closer than than the previous assessment is if owned for any length of time. Most of what I've seen end up re-assessing at 95+ cents on the dollar of the most recent sales price.

Tax rates aside, these days a very high number of Maryland homeowners are paying more than they need to in property taxes because their homes are assessed for far more than they could sell it for on the open market.

You can find out for free if you're one of the homeowners that should file an appeal by checking your home address in at this helpful appeal service http://valueappeal.com

Hi. I enjoy your real estate articles. Do you know how much less(%) I could expect to receive for my house if I sold it through an auction than through a realtor? Thanks for any help!

Hi, David -- glad you like the articles.

I haven't seen any research on seller price results in auctions vs. multiple-listing service. I know the assumption is that you get less from auctions, but I suspect it can vary. (Some agents do auctions and some auctioneers also use the multiple list, so you might seek out people who have experience with both.)

Thoughts, guys?

my taxes will be what you noted in that table? I don't have to think about the homestead tax credit then? Thanks.

jerseyjulie, the chart shows what property taxes work out to for a home assessed at the same value as the AVERAGE home price in each jurisdiction. So your mileage will probably vary!

You'll need to find out what the assessed value is for the home you bought (or are buying) and multiply it against the jurisdiction's tax rate to find out what your local tax bill will be. And you do want to think about the Homestead tax credit -- make sure you apply for it after purchasing.

I'm thinking of buying a house in Baltimore County, however when I checked to see what there taxes was, I was blown away! they were over 6,000.00,so I went to Baltimorecounty.gov web site to see what the sourounding houses taxes were and ranged from 2 Thousand to mid 3 thousand,
I really want to buy the house, how can I get the county to lower the taxes on this property, and how did they get this high?
could this be fixed before the purchase of the home.

Please help,
Katina

Katina, do you mean you looked up the property taxes the CURRENT owners pay on those homes? That's not really useful information for you as a buyer, thanks to the state's Homestead tax credit. Owner-occupiers' property-tax bills can't increase more than 4 percent a year in Baltimore County, so people's tabs can vary dramatically even in the same neighborhood.

To see what your tax bill would be, you need to look at the assessed value of the property. Divide by 100 and multiply by the tax rate (1.1 in Baltimore County).

If you think the assessed value doesn't accurately reflect the real value, you can appeal after you buy. Check out the links about property-tax appeals on this post: http://weblogs.baltimoresun.com/business/realestate/blog/2010/07/buying_a_home_in_the_baltimore_area_for_the_first_time.html

I understand that special taxing districts can make a simple question, such as what is my tax rate rather complicated. Outside of municipal taxes a big factor to consider is a fire tax, which you'll find in Howard and Frederick. These taxes usually vary by region. For instance, Howard has a rural fire tax rate of 11 cents and an urban rate of 13 cents. Everyone in the county will pay one of these two rates, so it really isn't fair to say that Howard's tax rate is $1.01. It really is either $1.11 or $1.13.

Oh and another thing about fire taxes is that the Homestead doesn't apply to them, so what you pay is not protected from rapid increases in assessments.

Good point, Robert. I wish there were a webpage tallying up total rates, but the best I've seen is the state Department of Assessments and Taxation list of county and city tax rates.

If ever I have some free time (hah), I would like to try to compile my own list.

Is any portion of the property tax paid deductable on tax return?

I'm gobsmacked by the massively higher rate for Baltimore City - 2.38 if you include the State portion. I found a house for sale in Mt. Washington near Balt. Co. border, sale price is $499,900 but strangely the assessment value is only $414,200. Even at the lower assessed value that's $9857.96 but had it been a mile up the road in the county it would only be $5020.10. $4837 difference, that's madness! Could really put someone off buying in the city.

Here's what the IRS says about property-tax deductibility, Matt:

"Deductible real estate taxes are generally any state, local, or foreign taxes on real property. They must be charged uniformly against all property in the jurisdiction and must be based on the assessed value. Many states and counties also impose local benefit taxes for improvements to property, such as assessments for streets, sidewalks, and sewer lines. These taxes cannot be deducted."

Hi Jamie -

What is the current state of the investment real estate rental market in Baltimore? I know that there are plenty of good discount priced investment properties, but are there enough renters looking for good quality properties?

Great blog - keep it up

Chris, the answer is going to vary a lot depending on which neighborhood. Some rental surveys are showing improvement on vacancies and rents (from a landlord's perspective), but it really comes down to doing your due diligence in the areas you want to buy.