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.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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