Property Tax in Maryland: A Full Breakdown

Are you looking to move to or within Maryland? You’ll need to brush up on property tax info ahead of time. If spending an afternoon deciphering tax code isn’t your idea of fun—don’t worry. This guide simplifies all the information you need to pay Maryland property taxes.

Property taxes don’t have to be confusing. Let’s start with a few basics.

Property taxes are assigned by the local governments of counties, cities, and school districts and fund public works like education and emergency services. They apply to what’s known as “real property,” which includes land, houses, and buildings.

The amount of property tax you pay is determined by the budget of the taxing unit (such as the county or school district), the tax rate, and the value of your home—which can change from year to year. Let’s take a look at current tax rates in Maryland.

Maryland’s average tax rates are around 0.99%, which is right at the national average. The state offers a variety of different programs and deductions to help homeowners reduce their property tax burden. These include homestead exemptions, senior citizen and disabled homeowner deductions, and tax credits for energy-efficient homes.

Montgomery County is one of Maryland’s most-desirable counties, encompassing the cities of Bethesda, Silver Spring, Rockville, and more. Its property tax rate matches the state average at 0.99%—though due to high property values, tax bills can be significantly higher here than elsewhere. The median annual payment is $4,859, which is about double the amount the average American pays ($2,471). The upside of this is well-funded public services and strong community programs.

The effective tax rate is a combination of all the taxes you owe to the taxing units where you live—for example, municipal governments and county governments can both assess property taxes, and you’ll pay both.

Property tax is assessed per $100 of your home’s fair market value in all Maryland counties. For example, if your home has a fair market value of $500,000 and the tax rate is 0.99%, you would divide $500,000 by 100 to get $5,000 and then multiply that by the tax rate of 0.99 for a tax bill of $4,950.

How is the fair market value of your home determined? In Maryland, there are two methods for residential properties. The first is the sales approach. This approach uses the recent sale prices of comparable properties to establish the value of your home—the idea being that if comparable properties sold for $500,000, your home is worth $500,000 too. This approach only works if there are enough recent sales of comparable properties that can be compared to your home. 

The cost approach is the second method of determining a residential property's fair market value. This approach assumes that the value equals the cost to construct a similar home, plus the cost of the land, minus depreciation for age or condition. Tax assessors use both methods to determine fair market value in Maryland.

Property taxes fund the budgets of your local governments—meaning they pay for things right in your local community. Common services funded by property taxes include:

How you’ll pay property taxes in Maryland varies from county to county. In Montgomery County, you can pay:

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