Taxes on real estate play a crucial role in funding local services such as education and fire protection in Maryland. With an average effective tax rate of 0.99%, the state falls in line with the national average. However, due to the high property values in Maryland, homeowners here typically pay more in annual property taxes compared to residents of other states. In fact, median annual property tax payments in Maryland counties can range up to $6,373.
Maryland Property Tax Assessment
Unlike most states, the responsibility for property assessment in Maryland falls under the jurisdiction of the state government. Properties are reassessed every three years to determine their fair market value, which is the price they would sell for on the market. Property owners are notified of any changes in assessed value and have 45 days to file an appeal if they believe the assessment is incorrect.
Maryland offers two important tax credits for homeowners. The Homestead Tax Credit limits increases in assessed property value to 10%. Furthermore, the Homeowners' Property Tax Credit caps property taxes based on income level, with households earning less than $60,000 eligible for this credit. For example, a household with a gross income of $30,000 will receive a credit for any property tax exceeding $1,680 annually.
Maryland Property Tax Rates
While property assessments are handled by the state government, local governments in Maryland set their own tax rates based on revenue needs. The average effective tax rate varies across Maryland's 23 counties and the city of Baltimore. These rates are calculated by determining the median annual property tax payment as a percentage of the median home value.
Montgomery County
Montgomery County, located in the Washington, D.C. metropolitan area, boasts one of the highest median home values in the country at $491,700. Although the property tax rates in the county are average at 0.99%, the median annual payment is quite high at $4,859.
Prince George’s County
Also located near Washington, D.C., Prince George’s County has significantly higher property tax rates compared to Montgomery County. With an average effective property tax rate of 1.34%, a homeowner with a $250,000 home would pay $2,475 annually. Rates may vary within each county.
Baltimore County
Surrounding the city of Baltimore, Baltimore County has tax rates that are equal to the state average but lower than those in the city itself. The average effective tax rate in Baltimore County is 1.26%.
Baltimore City
The city of Baltimore has some of the highest property tax rates in Maryland, with an average effective rate of 0.988%. Homeowners who do not receive any tax credits may pay even higher rates. In certain districts, additional taxes may apply.
Anne Arundel County
Located on the Chesapeake Bay, south of Baltimore and east of Washington, D.C., Anne Arundel County has an average effective property tax rate of 0.97%. Although the county's property tax rates are relatively low, high home values result in higher annual property tax payments. The median property tax payment in Anne Arundel County is $3,594 per year, $799 higher than the U.S. average.
Howard County
Howard County has the highest property tax rates in Maryland, with an average effective rate of 1.37%. Homeowners in Howard County pay an annual average of $6,373 in property taxes.
Harford County
Harford County, located in northern Maryland, has property tax rates slightly lower than the state average but in line with the national average. The county's average effective property tax rate is 1.02%.
Frederick County
Frederick County has one of the highest property tax rates in Maryland, with an average effective rate of 1.18%. In the city of Frederick, the total listed rate is even higher at $1.060 per $100 of assessed value.
Carroll County
Situated northeast of Baltimore, Carroll County is a largely rural area with an average effective property tax rate of 1.07%. A home worth $300,000 would result in an annual tax bill of approximately $3,210.
Charles County
Charles County has property tax rates slightly above the state average, with an average effective rate of 1.18%, ranking among the highest in Maryland.
If you're considering homeownership in Maryland or exploring options for refinancing your home loan, it's essential to be aware of the property tax rates in your area. By understanding Maryland's property tax system, you can make informed decisions about your financial plans.
