Property taxes are one of the largest recurring expenses for Maryland homeowners, and understanding how they are calculated can help you plan and budget more effectively. In Maryland, property tax bills are based on the assessed value of your property and the applicable tax rates set by state and local jurisdictions. The calculation follows a clear formula, but the underlying components—assessment and tax rates—can vary significantly depending on location.
Maryland calculates property tax using this formula: Property Tax = (Assessed Value ÷ 100) × Tax Rate
This means that for every $100 of assessed property value, the tax rate is applied to determine your annual property tax bill.
If your home is assessed at $300,000 and your combined state and local tax rate is 1.2%, your property tax would be: ($300,000 ÷ 100) × 1.2 = $3,600 annually
It’s important to note that Maryland tax rates are expressed per $100 of assessed value, not as a percentage. So even though the math works out the same, the formatting of the formula is slightly different from many other states.
The Maryland State Department of Assessments and Taxation (SDAT) is responsible for determining the assessed value of all real property in the state. This value is meant to reflect the fair market value of the property and is updated on a three-year assessment cycle.
To determine value, SDAT may use:
While the state rate is fixed at 0.112%, county and municipal tax rates differ across Maryland depending on local budget needs. For example:
Your total property tax bill includes a combination of:
In Maryland, calculating property tax involves both the assessed value of your home and the local tax rates in your area. By understanding the formula and staying informed about assessments, homeowners can better manage one of their largest annual expenses.
Contact Watter CPA today for help understanding and managing your Maryland property taxes.
