When Montgomery Village resident Esther Wells received her real estate property tax assessment in December, she was surprised. She said it was an almost 25% increase from her last assessment in 2021.
“I almost fell off my chair,” Wells said. “How are we supposed to afford these dramatic changes?”
Property tax assessments are distributed in three groups by the Maryland Department of Assessments and Taxation, so a third of Maryland homeowners received a new assessment for 2024 in December 2023.
Assessments are up an average of about 23.4% across the state, according to the asessments and taxation department. That number is slightly lower for Montgomery County at 21%, according to Michael Coveyou, the county’s director of finance.
Housing and finance experts say there’s a few reasons a homeowner’s assessment may be higher than expected. About 96.6% of Maryland homes assessed this year saw an increase in property value, according to the assessments and taxation department.
Advertisement“Stock, especially on the residential side is very meager right now, and values have been holding very well,” Coveyou said. “But value for actual transfers for actual sales have not declined over the last year. That’s probably one of the reasons that assessments would be up.”
Ryan Murphy of Rockville said he was also taken aback by his assessment.
“I’m definitely not a real estate expert, but it seemed kind of high,” Murphy said. “Definitely a big jump from my previous assessment. I just didn’t think that it would get quite that much on the free market.”
AdvertisementMurphy said he wasn’t surprised it was a bit higher than previous years–he knows housing is a hot commodity in the county–but still thought his assessment was high enough to question it.
Other homeowners, like Mike English, who owns a condo in Silver Spring, say they’re not as concerned by these increases, and that they’re necessary for tax revenue.
“I’m paying less taxes because my home is less valuable. I can’t afford a larger home,” English said. “I’m sure there are people whose homes are over assessed. It can happen. But there are also people that have had their house go up in value and are now upset the taxes reflect that higher value. I think it’s OK to tax well.”
AdvertisementRory S. Coakley is a real estate agent in Rockville. He said he’s been helping people file assessment appeals for more than 30 years. He said a homeowner should consider filing an appeal if they have reason to believe the assessed value is inaccurate. However, homeowners should also consider potential risks. For one, when the home is reassessed, the state could realize it under-assessed the home, and the homeowner could end up with a higher tax assessment, Coakley said.
“You want to make sure you know what you are getting into,” Coakley said. “Your assessment may be higher because you have a well-valued home. I often ask my clients what they would want their property to sell for, to put it in perspective.”
The process is very specific, Coakley said. First, a homeowner can either choose to file the appeal on their own or meet with a real estate expert. The homeowner will need to collect their income statements, tax documents, rent information if they are taking renters and other information that gives the most detailed scope of the property.
AdvertisementCoakley said if he reviews his clients’ assessments and finds they are accurate, he advises the client not to move forward with an appeal and does not charge them. However, if there is a case to be made, they will move forward with an appeal.
The first level of appeal is called the supervisory appeal, which is essentially an exchange of information with the supervisor of appeals about the property. Next, a homeowner can take the case to the Maryland Property Tax Assessment Appeals Board. Montgomery County homeowners have their hearings in Rockville.
“You’re sworn in, and it’s a little like a courtroom. The assessor goes first, then we make our case. There’s rebuttal as back and forth and you can speak directly to the assessor,” Coakley said. “But it’s pretty friendly and loose.”
AdvertisementAfter a couple of weeks, the homeowner will receive the results in the mail.
“You’re either satisfied or you might not have gotten a reduction. Sometimes you meet halfway. A lot of times the assessors may dig in. Sometimes they’re flexible. But you’ve got to decide if you want to go forward because the next step is the tax court,” Coakley said.
Within 30 days of receiving the verdict from the Property Tax Assessment Appeals Board, the homeowner can file an appeal with the Maryland Tax Court if they’re unsatisfied. Coakley said the homeowner needs to have a really strong case for this to be worthwhile. The homeowner may end up having to testify in Baltimore, or hire a lawyer, depending on the circumstances.
Advertisement“When the assessor has to go to tax court, they have a whole new round of work they have to do … it’s almost like an appraisal,” Coakley said. “So, we start negotiating with them. We try to avoid going to court as much as we can.”
Wells said she plans to attend her first assessment hearing in person, and has also helped friends and neighbors file appeals.
“I plan to be there in person because I really want to humanize this experience and what they’re doing to families,” Wells said. “I’m not just the bill number, I’m not just the assessment number.”
AdvertisementThe county doesn’t have control of these assessments, Coveyou said. It’s all handled by the state.
But Wells thinks the county should still be doing more to mitigate the effects of high taxes on homeowners. She’s concerned rising assessments could affect marginalized community members, and she thinks the county government should rethink raising property taxes while assessment rates are on the rise.
Advertisement“I think the government needs to pace themselves with property taxes as a revenue stream,” Wells said.
Murphy said he thinks the county needs to focus on increasing its supply of affordable and
“missing middle” housing to put less pressure on current housing as a commodity.
“Exclusionary zoning is the reason that house prices have been going crazy. It’s a double-edged sword… if you want lower assessments you need a lower valued home. People might not want to take that trade off,” Murphy said. “But I think the right thing to do is to advocate for allowing more density and more mixed-use housing.”
AdvertisementThe appeal form and more information are available on the Maryland Department of Assessments and Taxation website. Appeals must be filed by Feb. 12.
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