With the ringing in of the New Year it also means it's that
time of year again for Maryland property owners—tax
assessment time.
So perhaps you are one of the lucky one-third (1/3) of property
owners in the State of Maryland who just received your new real
estate tax assessment notice for your property. In fact, every
property in the State of Maryland is required by law to be
re-evaluated and re-assessed every three (3) years. And depending
on the real estate market, your new assessment may go up, or it may
go down. This year the chances are fairly certain that your
assessment went up, along with the rest of the real estate
market.
It is a proverbial double edged sword. The good news is that your
property value went up and is worth more. In fact, that's great
news if you're planning to sell! The bad news is that if
your property value went up, so will your real estate taxes, since
your real estate taxes are based on the assessed value of your
property. The additional good news; however, is that if you feel
your property has been assessed too high, you have a right to
appeal the new assessed value. Appeals must be filed with your
local office of the State Department of Assessments and Taxation
(SDAT) within forty-five (45) days of the date of the assessment
notice.
As noted at the outset, all properties located in the State of
Maryland are required to be reassessed on a three (3) year cycle.
So every year one-third (1/3) of the properties in the State are
reassessed. Each local office of the SDAT located in each county in
the State groups the properties located in the respective county
into three (3) groups, and each of those three (3) groups is
re-assessed every three (3) years on a revolving basis.
Everyone will recall the booming days before the real estate market
bubble, when real estate values (and the assessments) were steadily
climbing and increasing, often by double digit percentages,
especially from about 2004 - 2008. When the markets and the real
estate bubble burst, real estate values plummeted. The only good
news to develop in the years following that real estate market
nightmare was that the assessment values followed the market and
also started to decrease, along with the related real estate taxes.
More recently, the real estate market has bounced back and real
estate values have been increasing. But of course that means
assessment values have also increased.
This year estimates are that residential real estate assessments
state wide in Maryland increased by an average of over 6% and
commercial real estate values had an average increase state wide of
over 13%. Of course depending upon where your property is located,
and your local real estate market conditions, those increases may
be more or less.
If you think your property has been assessed too high you have the
right to appeal your new assessment. Once you do so, you can obtain
more information from the SDAT to see how your property was
reassessed. Perhaps an error was made. With the assistance of an
experienced real estate attorney you can evaluate the information
and determine whether you want to pursue an appeal. But whatever
you do, if in doubt, don't miss the appeal filing deadline.
Otherwise, your recourse will be to file an "out of
cycle" appeal and you would not get the benefit of any
reduction for the full three (3) year tax cycle.
While the thought of challenging the tax man and the appeal process
may seem intimidating, do not be discouraged. With assistance from
knowledgeable professionals, including a real estate attorney, you
can exercise your rights and the benefit of the appeal process and
hope to get your real estate tax assessment and, with any luck,
your real estate taxes, reduced.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.