Property owners seeing sharp increase in tax assessments

Greg Larry, Cumberland Times-News, Md.
·4 min read
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Jan. 16—CUMBERLAND — Many Allegany County property owners are getting a shock this year when they discover their tax assessments from the state of Maryland have increased sharply.

The Maryland State Department of Assessments and Taxation recently issued a first round of tax assessments to some property owners. SDAT published a news release on Maryland.gov making residents aware of the sharp increases taking place.

"Property values rise 20.6% according to SDAT's 2023 assessment," the release said. "The percentage includes the largest property value increase in several years and a rise in values since the onset of the pandemic."

Michael Higgs, SDAT director, said, "All 23 counties and Baltimore City experienced an increase in residential property values for the fifth consecutive year, while commercial property values also increased in all 23 counties and Baltimore City."

Properties in Maryland are separated into three groups. SDAT recently sent the tax assessment information for Group 2 property owners.

"There are more than 2 million property accounts which are split into three groups, each appraised once every three years," the release said. "SDAT announced its 2023 reassessment of 779,573 Group 2 residential and commercial properties on Dec. 29."

"We don't have all the information yet on the assessments," said Jason Bennett, Allegany County administrator. "But, the state reassessment ... there are three zones in Allegany County they call it, and they reassess one of those zones every three years. The information we have right now is based on the reassessment of Zone 2, which is like the Georges Creek area. That zone did take a jump. It jumped by about 23.5%."

The news release said the overall statewide increase was higher than 2022's 12% increase, representing an average increase in value of 22.2% for all residential properties and 15.8% for all commercial properties over the three-year period since the last Group 2 reassessment for January 2020, prior to the pandemic.

"The 2023 assessments for Group 2 properties were based on an evaluation of 89,880 sales that occurred within the group over the last three years," the release said. "If the reassessment resulted in a property value being adjusted, any increase in value will be phased-in equally over the next three years, while any decrease in value will be fully implemented in the 2023 tax year. For the 2023 reassessment, 96.4% of Group 2 residential properties saw an increase in property value."

"It is largely based on property transactions," said Bennett. "That's a big piece of the formula for how they do assessments. When they reassess the property they give it for the next two years as well. They base them on market data, too, so the last year reassessment was also strong because the market was good then as well. So we are probably going to see some more growth but we don't know until they send it to us."

"This is a good indicator that the market remains strong and growth is steady here in Maryland," Higgs said in the release. "The department's real property assessors continue to work hard to ensure that all of Maryland's properties are assessed uniformly and fairly. As part of our Tax Credit Awareness Campaign, each reassessment notice includes information about the Homeowners' and Homestead Tax Credits, which save Marylanders more than $260 million in taxes each year."

Bennett said the county has received a few calls about the increases. "We don't do it here so we point people to the Maryland Department of Assessments and Taxation and when you do that you can appeal," he said.

"We have something called the Homestead Tax Credit and it's statewide," Bennett added. "It allows up to a 10% ceiling on your property tax increase. It is set up to protect homeowners from massive tax increases. Our rate is set at 4% in Allegany County. If someone has applied for the Homestead Tax Credit, their assessment may go up by 20% but they will only pay 4% more in any given year. It protects them."

At 4%, Allegany County has one of the lowest tax credit caps in the state.

"You can apply on the SDAT website," said Bennett. Residential property owners who complete a one-time application and meet certain eligibility requirements can receive the credit.

County Commissioner Creade Brodie Jr. commented on the assessments during a Thursday meeting.

"The last couple days I've been seeing some of these assessments," he said. "People are taking pictures and showing them to me where their assessments have jumped by 30% or more. Now if that happens, they can apply for the Homestead Tax Credit and then it can only go up 4% a year which is still a lot to swallow. But please apply. It is only good if you use it."

Bennett said, "We only have that piece so far. We will have the rest (of the groups) here within the next three weeks. Usually late January early February."

A map of which properties fall into Groups 1, 2, and 3 and their respective years for reassessment can be viewed on SDAT's website: sdat.dat.Maryland.gov.

Greg Larry is a reporter at the Cumberland Times-News. To reach him, call 304-639-4951, email glarry@times-news.com and follow him on Twitter @GregLarryCTN.