Maryland Residential Real Estate Tax Assessment
Are you wondering if now is the time to buy or sell your residential real estate in Maryland? If so please read this article that contains pertinent information for you! With the market softening, and in some parts of the state home values falling, some owners of Maryland residential real estate should be ready for a higher property assessment. According to the State Department of Assessment and Taxation, over the past 3 years property values for Maryland residential real estate owners and businesses have increased roughly 33% on average. Lets break this down a little further in Prince George's County the assessment increased 51.6% over three years, this is only second to Baltimore's whopping 75% increase. Homes in Charles county climbed in there assessment by roughly 41.4%, and in Anne Arundel county residents saw 34.9% increase. Howard County saw an increase of 24.2%. Finally the home owners in Montgomery County assessment rose only 16.2%, which is the smallest increase that any of the jurisdictions within the state of Maryland saw.
The tax rates set by the government in the spring of 2007 will be applied to these newly assessed values. Even with the increase in the assessed value of your home many Maryland residents will be able to qualify for Homestead Credit. What is a Homestead Credit? The Homestead Credit was developed to help homeowners deal with a large jump in the assessment of their principle residence. What this credit does is limit the increase of taxable assessments every year to a fixed percentage. In this state, the fixed percentage is 10% or less depending on which county you reside in. To make this simple, this means that the home owner does not have to pay property tax on the market value increase which is greater than the limit. For example say you have a property which was assessed $100,000 and your new assessment for the first year is $120,000. With an increase of 10% this would result in an assessed value of $110,000. Next you take the difference between the $120,000 and $110,000 which is $10,000. What this means is that the tax credit would apply to the taxes that are due on the $10,000. So if the tax rate was $1.04 per $100 of assessed value than the credit would be $104($10,000/(100*$1.04)). One important change to note this year is that in order to qualify for the Homestead Tax Credit, the Homeowner must submit the application. In past years the qualified property owners were automatically enrolled for this credit.
