How Do I Calculate Property Tax in Maryland?

If you own a home or are planning to buy one in Maryland, it’s important to understand how your property taxes are calculated. Fortunately, Maryland uses a straightforward method. With a little basic information, you can easily estimate what you’ll owe each year and plan your finances accordingly.

The Basic Property Tax Formula

In Maryland, the formula to calculate your property tax is: Property Tax = (Assessed Value ÷ 100) × Tax Rate

Here’s what each part means:

• Assessed Value: The value assigned to your property by the Maryland Department of Assessments and Taxation (SDAT), not necessarily your home's market price.
• Tax Rate: The combined tax rate set by the state, your county, and sometimes your city, usually expressed per $100 of assessed value.

Step-by-Step Example

Let’s walk through an example:

• Assessed Value: $350,000
• Local Tax Rate: $1.10 per $100 of assessed value

Using the formula:

• First, divide the assessed value by 100:
  $350,000 ÷ 100 = $3,500
• Then, multiply by the tax rate:
  $3,500 × $1.10 = $3,850

In this example, the estimated annual property tax would be $3,850.

Where to Find Assessed Values and Tax Rates

• Assessed Value: Check the Maryland SDAT Real Property Search to find your property’s current assessed value.
• Local Tax Rate: Visit your county or city’s tax office website to find the current property tax rates for your area.

Keep in mind that tax rates can vary significantly depending on where your property is located, and they can change annually based on budget needs.

Factors That Can Affect Your Final Tax Bill

Several factors can influence your final property tax amount, such as:

• Tax credits (like the Homestead Credit)
• Special assessments
• Changes in local tax rates
• Property reassessments

Applying for eligible tax credits can help reduce your overall bill.

Conclusion

Calculating your property tax in Maryland is simple when you know the formula: divide the assessed value by 100 and multiply by the local tax rate. With accurate information, you can easily estimate your annual property taxes and plan your budget accordingly.