Every house on the comp sheet for my neighborhood saw a reduced assessment in 2010 over 2007 assessments. Except for one house; mine. In my meeting with the assessor I was told "Well, you got a break last time." That was a reference to our successful appeal in 2007. So since I was successful in 2007, I guess I'm not allowed another reduction, even though property values continue to drop. We are waiting on the court date for our appeal this go round.

Bill - all I can say is "Well there you go" .

I am a mortgage banker I can can attest for this first hand. Many are homeowners have seen their property taxes increase. Yes, you heard me right, increase. Some of these homeowners property values have dropped in half.

For anyone who doesn't understand. Let's say the value of your house in 2007 was $500,000. Let's say the value of your house in 2011 (almost there) is $250,000.

Value = what your home will sell for today not what your preconceived notion of your properties value is.

Assessments are based on real Property Value. How can a homes value drop in half yet their assessed value( property tax) increase?

As I said - "well there you go"... and you think the economy is getting better and real estate is leading the way out? hmmmm...... did someone say elections?

Bill, was it the assessor's contention that your home value hadn't changed between your successful appeal and today's date? (That would be the only rational argument I can think of for denying the current appeal.) Let us know what happens!

Lewis, are you seeing residents whose taxes have increased because their property assessments didn't follow in step with market values? Or are their taxes increasing because of the effect of the Homestead credit, namely that they were paying on just a portion of their assessment to begin with?

Is it possible to appeal the assessment on a house I do not own? I am purchasing a property that will close in February but the assessment is 100K above my purchase price. Thoughts?

Chris, you can appeal once you buy and have your appeal considered in time for the next tax year, which starts July 1. The various deadlines for appeals have one exception, and that's for people who purchase homes in the first six months of the year. As long as you appeal within 60 days of purchase, you're good to go.

More here: http://weblogs.baltimoresun.com/business/realestate/blog/2009/12/appealing_a_property_assessment_on_an_offyear.html

And also here: http://weblogs.baltimoresun.com/business/realestate/blog/2010/03/no_need_for_buyers_to_wait_to_appeal_tax_assessment.html

Jamie, Hello. I can't see those links. Are you able to repost? Thank you.

Mark, did you mean the links in the comment above? Punctuation was interfering with them -- I fixed that, so you should be able to follow the link now.

Jamie can I ask for some clarification re: the folks who were benefitting from the Homestead Tax Credit and paying only a portion of taxable value?

So when this new round of assessments comes out in the next few days, and let's say their house is now assessed at a lower value - - is this like a clean slate for the Homesteaders? Do those folks that were paying only portion now have to start paying the full amount of taxes at the newly assessed lower value - - even though it's likely a good amount more than what they were paying before with help from the Homestead credit (if they were longtime occupants)?

The 4% cap is strictly applied to 4% of increased assessment value correct? Not 4% increase in taxes? (So for instance, in the circumstance above, it wouldn't apply to cap an increase in property taxes?)

Thanks! Just trying to get a handle on this!

I purchased a home in Baltimore City in November. I have emailed and faxed the forms to the city for a property assessment appeal. It needs to be there before the end of the year. I have not heard anything from the City. Can I assume that they have it to review, or do I need to follow up?

Jim, I don't think that will work -- the forms need to be mailed, and specifically to the state Department of Assessments and Taxation. Here's what the agency says on its appeals page: "The completed form should be mailed to your local assessment office." (So you will be mailing it to the agency's city office, but not to the city government.) Link here: http://www.dat.state.md.us/sdatweb/appeal.html

I see that the state has added an online appeal option for people to contest the new round of assessments, but that doesn't look like something that other homeowners -- those appealing a new purchase, for instance -- can use.

SLL, this sure is a complicated issue!

If you qualify for a Homestead credit, the drop in assessed value doesn't prevent you from still qualifying. But qualifying is different than receiving, if you see what I mean. The amount of your credit will decline if the assessed value does. It could even fall to zero, if the new assessed value declines enough -- but if that happens, it means your tax bill will drop, so that's good news for you.

The Homestead credit works as a cap on the amount of assessment you can be taxed on, but as long as the tax rates don't change, it's also effectively a cap on your tax bill.

So if your total value was $250,000 and you've just been reassessed downward to $200,000, but you were paying taxes on $150,000 of that, you don't zoom up to $200,000 for tax purposes. You'll increase to $156,000 for taxable purposes (if you're in the city) -- a 4 percent increase. Make sense?

It should be noted that the Homestead credit only applies to your primary residence. If you own rental property, you should scrutize your assessment with a fine tooth comb for the purpose of determining whether an appeal is worth your time and effort.

True, Ed!

Does the SDAT database already reflect the new values? If so I got mega lucky. I purchased my house in July/August and it appears the assessment came in way lower than my purchase price.

Looks like it to me, Matthew, based on my own assessment. Check the "Value" category on yours -- does it say "As Of 01/01/2011"? If so, then it should be updated.

Yep that's what it says. Boy did i luck out. I purchased for around 70k more than the last assessed value but it only went up 9k. Do you know of any reason that could possibly get bumped earlier than 3 more years? Or is it set and forgotten by the state unless there is an appeal?

The key exception I know of to the once-every-three-years rule is for major home improvements, Matthew. More details here: http://weblogs.baltimoresun.com/business/realestate/blog/2010/12/dont_get_surprised_by_this_propertytax_rule.html

I can't understand why some counties in the state of MD (Prince Georges and Anne Arundel counties) have had their home values dropped and some counties have not (Montgomery County and Frederick County, Md).
What gives???...please explain why this is? Thanks!

B Ellerbe, perhaps you're looking at the wrong data? Every county saw a drop in average assessed value. Montgomery County's average decline was 17 percent; Frederick County's was 26 percent.

PDF here: http://weblogs.baltimoresun.com/business/realestate/blog/Assessments.pdf

Scroll to the last page and make sure you're looking at the "residential" column.

Thanks for the explanation Jamie - makes sense now!!

I was planning on selling my house in the spring, isn't this lower assessment going to impact the sale price, as it is much lower than what I am seeing houses sell for in the area, should I appeal it to go higher?

Your call, Gen. I know people sometimes do appeal to get the assessment increased. On the other hand, you could use it as a selling point, since prospective buyers' taxes would be lower.

Buyers, how much attention do you pay to the assessed value in terms of what you plan to offer? Does it have any effect?

Assessed values really aren't market values. A house that just settled for 360k in the last 30 days was just re-assessed for 273k. Another house that sold for 800k within the last three months was just re-assessed for 510k. Buyers needs to realize that assessed value is different than market value - the lower assessments keep the taxes lower, keeps monthly payment lower.

I don't know where Gen is selling his or her house, but as a buyer in Baltimore City, I only pay attention to the assessed value to figure out how high my taxes would be. It seems that things have settled down a bit after this last round, thankfully (I checked MDSDAT today to look at the newly assessed values of some houses we have our eye on) - - but in general, the assessments are still MUCH higher than the list prices (I'm sure that varies by neighborhood - - we're focusing on Mt. Vernon/Bolton Hill/Res Hill).

So Gen, if you're selling in the City, I wouldn't appeal for a higher assessment, personally... I can't answer for outside of the City.

Gen, I am a buyer looking for a house in Montgomery County. I do pay attention to assessment values. I think this is one of the factors affecting my possible offers. Assessment values are a reflection of the market prices, not very precise as this would be naturally not possible (no poerfect market data etc). So the fact that assessments went down is VERY GOOD for buyers. So if a house is listed for 1.2 mln with the old assessment at 1.15 and the new assessment at 1 mln, and has not sold for 4 months, it will be difficult for the sellers to stick to the list price of 1.2 if they want to be realistic.

Hello,
The comments posted above are very helpful. However, I still can not determine whether our tax bill will go down or up and so any help is greatly appreciated. In our case we've seen a 35% drop in the assessed value (i.e., 2008 assessed value 975K; 2011 value ~634K). How can I determine whether this will translated into a lower tax bill. Thanking you in advance. gpaq

Hi, GPaq -- once you know what you're being taxed on for the current tax year (the one that started July 1, 2010), then you can calculate how your tax bill will change next July.

First, take a look at your "taxable assessment" for July 1, 2011 -- the first row on your new assessment notice. (Focus particularly on the "County or Balt. City taxable assessment" box.) Is it lower than the new market value figure? If so, your taxes will rise in July because you still have a gap between your total assessment and the portion of it you're being taxed on.

If the taxable assessment is the same number as your new market value figure, that's trickier. To figure out whether your bill is staying the same or dropping (and if dropping, how much), you'll need to calculate your 2010 taxable assessment.

See how much you paid in taxes for the
current year. If you live in the city, you can look your tax bill up here: http://cityservices.baltimorecity.gov/realproperty/default.aspx

If you know how much you paid in city (or county) taxes, as opposed to your full local and state tax bill, multiply that figure by 100 and divide by your local tax rate.

Rates here: http://www.dat.state.md.us/sdatweb/taxrate.html

If you only know your full bill, multiply by 100 and divide by the local plus state tax rate. (It's better to focus on the local amount if you can, because your previous local taxable assessment might have been different from the state assessment -- the state Homestead cap is 10 percent, and many local jurisdictions set their caps lower than that. But you'll at least get the general idea, since local taxes are the lion's share of the bill.)

Does that make sense?

If anyone has a simpler solution, please share.

Regarding the Appeal process: The best way appeal is to compare your assessment to your neighbors. Keep an open-mind, and make sure you are fully informed of the process.

After buying my home in 2007, I successfully appealed my assessment in 2008. That year my assessment notice was over 25% more than the price I bought my house. Looking at all of comparable sales in my neighborhood within the same year, I found their assessments were within 5%-10% of their sale price. So I successfully appealed that my house was over-assessed, and ended up with a value pretty much equal to the sale price of my home.

I won my appeal at the first step, but their are 3 steps of the appeal process. It is explained in the information you are sent (make sure you read everything).

Even if you successfully appeal your assessment, don't expect a break in your tax bill. Which is what some of my neighbors found out, especially the ones that have been in their homes a long time with large Homestead credits.

BTW, I just got my 2011 assessment notice and saw another 15% decrease. At this point, I see no need to re-appeal.

The tax issue(s) presented here are definitely quite confusing on a number of fronts especially to new home owners such as myself.. After reading through the comments above several times I just wanted to confirm I am doing my calculations correctly and maybe offer a step by step process to my thinking.

My circumstance is very similar to most of the people above in that my primary residence in Balto. county saw a ~8% decrease in value in this latest round of re-assessments for 2011. In trying to calculate what this would mean regarding my homestead credit [similar to question asked by "SLL" above] it essentially boiled down to several calculations.

1. If you are in Baltimore County, a very useful site to use as a starting point is the Real Property Tax link which will allow you to see your exact tax payments with separate breakdowns for any homestead credit amount / sewer& water charges / etc for the last 3 years: https://egov2.baltimorecountymd.gov/OBFTAX/

2. Going off Jamie's reply regarding the true amount/portion you were are actually paying taxes on.. This value needs to be calculated based on the current homestead credit you are receiving:

An Example (For Baltimore County*):
Taxable assessment value for 2010-2011 was: $350,000
New Market Value as of July 1, 2011 is now: $300,000
Homestead credit value for 2010-2011: $1500
2010 Tax Payment: $2742 (follow calculations below)

a.) Tax value (excluding water/sewage/etc): 350,000 / (100 x 1.212)** = 4,242. --This is the "full" amount you would be taxed in 2010 ignoring the homestead credit momentarily.

b.) "True" value/portion you are being taxed on: 4,242 - 1500 = 2,742 ..working in reverse now, 2,742 x 100 / 1.212 = ~$226,237 --This true portion means that by factoring the homestead credit in you are essentially only paying taxes on an assessment of $226,237.

c.) Now If I understand this correctly, $226,237 + 4%*** (baltimore county) = $235,286 will be your new 2011 "true"/portion taxable amount. Using the same calculations as above but with the 2011 values:

New assessed Market Value: $300,000 / (100 x 1.212 ) = $3,636 "full" 2011 tax amount with no credit. Using value calculated in c.) above we know the "adjusted" tax value for 2011 will be $235,286 / (100 x 1.212) = $2,851.

d.) The difference between "full" 2011 tax amount of $3,636 and the adjusted homestead credit amount must therefore equal = $2,851.. So $3,636 - $2851 = $785. The new homestead credit value for 2011 will be $785.

New Market Value: $300,000
Homestead credit value: $785
2011 Tax Payment: $2,851

Conclusion: Even though the assessment of your house decreased by $50K in the example above for 2011. The taxes paid on the property [because of the significant loss of homestead credit] would actually INCREASE by $109 in this case.

Please let me know if my calculations are way off base here or I am missing some other critical step in the calculation process.

* if not in baltimore county you can use the link Jamie posted for rates in MD here http://www.dat.state.md.us/sdatweb/taxrate.html
** this value is a combination of county tax rate + state tax rate (1.212) per $100 dollars
*** maximum yearly tax increase / homestead credit info is listed here http://www.dat.state.md.us/sdatweb/homestead_percent.html

Disclaimer: the above calculations were done with a minimum of caffeine or other substances that may have improved their accuracy and likewise may induce drowsiness, mass confusion, or other symptoms. I apologize ahead of time =)

AlexL, that caculation looks almost exactly spot-on to me. It'll get you close to what you'll be paying next year, but probably not precisely -- I'll explain why not in a moment.

First, one thing about terms: "Taxable assessment," in state parlance, means the amount you're actually paying taxes on. The "market value" is the full assessment. When you referred to your 2010-11 taxable assessment example of $350,000, I'm assuming you meant the market-value figure for the current tax year (the "old" full assessment).

Now on to the explanation:

Baltimore County's Homestead cap isn't the same as the state's -- 4 percent for the county, 10 percent for the state. Thus you can end up with a taxable assessment for county tax purposes that's different than the taxable assessment used for state tax purposes.

The taxable assessment you calculated melds the city and state results together. If you know how much you paid in county tax vs. how much you paid in state tax, you can calculate the separate taxable assessments and then see, for instance, if your state assessment will actually jump the full 10 percent or if the new market value figure dropped enough that you'll get a smaller increase (or even no increase). Because county taxes are the lion's share, though, your calculation should be close enough to give you a good idea of your new bill.

In any case, if you just got a new assessment notice, the first thing you want to do is compare the "taxable assessments for July 1, 2011" figures to your new market value. Is the county (or city) amount of taxable assessment LOWER than the new market value? Then you know without going through complicated gyrations that your county (or city) taxes are increasing as much as the Homestead cap allows. See if the same is true of the "state taxable assessment" figure; in my case, my local assessment is increasing as much as the cap allows but my state assessment isn't.

It's only if your taxable assessment figures are exactly the same as your new market value that you'll need to do the calculations to figure out which of the following is true:

1) A tax decrease of exactly the same percentage as your full assessment decrease

2) A tax decrease, but not as large as the full assessment decline

3) No change in taxes

4) An increase in taxes, but not as much as the Homestead law allows

5) An increase in taxes to the full extent that the Homestead law allows

Oh, my head.

And if this weren't complicated enough, if you settled on your home after July 1 of last year, you don't become eligible for the Homestead credit until July 1, 2012 -- not next tax year but the following one. However, if the previous homeowner was collecting a Homestead credit, you've been "inheriting" it for the rest of the current tax year, so you'll definitely see a jump in taxes come July 1 -- a completely uncapped increase. You'll be taxed on the full market value amount and will only be protected from increases later ... though, of course, if your new value dropped, there will be no increases for the three-year cycle.

More on that Homestead rule here: http://weblogs.baltimoresun.com/business/realestate/blog/2010/09/a_propertytax_reminder_for_new_buyers.html

I didn't invent it. I just try to explain it. Other, clearer explanations happily accepted. (Also corrections, if needed. It's been a long, tiring day.)