How Are Property Taxes Calculated in Maryland?

Understanding how property taxes are calculated in Maryland is essential for homeowners, buyers, and real estate investors. Unlike states with a simple statewide tax structure, Maryland uses a combination of state, county, and municipal tax rates along with property assessments to determine your annual bill. The process is straightforward once you understand the key components that drive the calculation.

Property Assessments Determine Your Home’s Taxable Value

In Maryland, property taxes start with the assessed value of your home. The Maryland State Department of Assessments and Taxation (SDAT) is responsible for assigning this value.

How assessments work:

• Properties are reassessed every three years.
• Assessments are based on market value, meaning what the property would likely sell for.
• Maryland uses a phased-in assessment system. If your assessed value increases, the higher value is introduced gradually over three years rather than all at once.

This phased-in approach helps prevent sudden spikes in tax bills when property values rise quickly.

Local Governments Set the Tax Rates

Once your property’s assessed value is determined, tax authorities apply the appropriate tax rates. Maryland’s property tax rates are set by:

• Counties and Baltimore City
• Municipalities (for properties inside town or city limits)
• The state of Maryland (a small statewide property tax)

Property tax rates in Maryland are expressed as a rate per $100 of assessed value. For example, a county rate of $1.10 per $100 means you pay $1.10 in tax for every $100 of your home’s assessed value.

Applying the Property Tax Formula

To calculate your annual property tax bill, use this formula:

Property Tax = (Assessed Value / 100) × Tax Rate

Example: A home assessed at $350,000 in an area with a $1.20 per $100 tax rate:

• 350,000 / 100 = 3,500
• 3,500 × 1.20 = $4,200

Your annual property tax bill would be $4,200.

Tax Credits Can Reduce the Final Amount

Maryland offers several programs that may reduce your bill:

• Homestead Tax Credit – Limits how much your taxable assessment can increase each year for a primary residence.
• Homeowners’ Tax Credit – Helps low- and moderate-income homeowners by capping taxes based on income.
• County-level credits – Many counties offer additional relief programs.

Final Thoughts

Maryland property taxes are calculated using a clear combination of assessed value, local tax rates, and tax credits. The key is to understand your property’s assessment and the specific rate in your county. With the right information, homeowners can anticipate their tax bill and take advantage of credits to reduce their costs.

If you’d like help confirming whether your Maryland property tax bill is accurate — or making sure you’re claiming all available credits — contact Watter CPA and let our dedicated team walk you through the numbers and your options.

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