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How To Challenge Your Maryland Property Tax Assessment

March 13, 2009 by  
Filed under Featured

US Supreme Court

When property values were rising, local governments were loving the new higher property tax assessments that went along with that. Existing homeowners were protected from quickly rising tax bills by the Maryland Homestead Tax Credit. But, new homeowners aren’t immediately protected by the Homestead Tax Credit. Still, at least they know in advance how high their tax bill might be. Now that most homeowners have had their property values decline with the housing market and slow economy, assessments will lag behind. Maryland assesses property values every three years. So two thirds of the homes will not be looked at this year. For that one third it remains to be seen if assessments will drop. In the end the responsibility falls to each homeowner to make sure their assessment is fair.

So, how do I challenge my assessment? Property assessments are supposed to reflect property values in a theoretical arms length transaction. This means if a neighborhood house was foreclosed on, or sold to a family member, the transaction value does not impact assessments. If we have enough of these transactions, as we do in some neighborhoods, then regular sales values are affected. These regular sales can then be relied on as evidence of reduced assessment values. You can look up sold prices at the Maryland SDAT property tax search, or you can ask a Realtor for a report on recent solds. If you promise me you will spread the word to family and friends about the website and homes search, I’ll make you a report of the last 50 homes that sold within a circle around your home.

Read through the American Homeowners Association “Property Tax Reduction Kit“. This document is a good general guide to how to approach an appeal. It is not Maryland specific however. Next you might want to look over the Maryland Assessment Procedures Manual. Also, you may want to take a look at the updates. And SDAT has written a guide to the appeal process. For more background, here is an example worksheet for calculating the property assessment on a particular house. Everyone can order a copy of the worksheet for their house. If you are appealing then you have the right to order the worksheet for anyone’s house. Everyone is to be treated equally under the assessment process. You can use other peoples worksheets as a guide to how yours should be done. Each worksheet costs one dollar.

Armed with any factual discrepancies on your house, worksheets of similar houses, and sold prices in your neighborhood, you have a reasonable chance of reducing your assessment at an appeal. The first level of the appeals process is with the person that assessed your property in the first place. If you have an unfinished basement, but the tax records say it was finished, with proof, you will win this battle. Another avenue of attack is condition. The assessor has leeway to say the condition is less than 100 percent. This can translate into a percentage reduction in that portion of the value. The rest of your appeal will be more difficult. Your home has been categorized into very specific categories. If a neighbors home is a different style, then the assessor might not take it as evidence of inequity of treatment. If you can, get worksheets for homes styled like yours. The assessor will argue that you are protected by the Homestead Tax Credit, so you need not worry that the assessment seems high to you. Don’t let them get away with that. You could argue right back that since your tax is limited by the Credit, they might as well lower the assessment. A lower assessment could make it easier to sell your house, since the new owner will be taxed at the assessed value.

The next level of appeal is more formal than the first. Still, there are no fees, and you don’t need a lawyer. You can represent yourself. This appeal is before your county Property Tax Assessment Appeals Board. This is composed of three local residents appointed by the Governor. Be sure to request in writing at least 15 days before your hearing, a list of the comparable properties that will be used by the assessment office before the Board. Read over the rules for the board.

If you are still not satisfied with your ruling, you can appeal to the Maryland Tax Court. This too is made up of people appointed by the Governor. It is an administrative court under the Executive branch of government. It is still informal, but a lawyer might be wanted at this hearing. For any level in the appeals process, you might find it instructive to read some of the past rulings of the Maryland Tax Court.

Now that you have gone through channels, and used up your remedies within the Executive branch of government, your next option is to try appealing through the Judiciary court system. Another option, which a friend of mine succeeded with, is to petition the Legislative branch of government for a change of the law. This is another story, but in his case, the law did change…but this only benefits the rest of us. His case was still correct under the old law.

I am not a lawyer. I am only reporting my limited knowledge of the assessment and appeals process. If you have gone through this, or have any tips, please comment below.

Photo credit, dbking.


One Comment on "How To Challenge Your Maryland Property Tax Assessment"

  1. Mary Abe on Wed, 29th Sep 2010 8:56 am 

    Here is my question/rant.

    I bought in the town of Mount Rainier right at the bubble–as well as few other unlucky people on my street.

    I have fought my tax assessment and will continue to do so.

    Recently, there have been 3 or 4 short sales/foreclosures on my street alone. My mortgage is for 300K. My house needs kitchen, back porch, one bath only,other work. I was thinking I would need to sink money in…but that value was good. And then bubble burst. I am now thinking I will walk away from my home because I don’t see how I will ever even break even. See issue below.

    The foreclosed houses went for 86K…3 bed, 2 bath, new kitchen…Now…those folks will be able to sell at 200K and make money if property values even begin to rise. But the real question that is in my crawl. How will their property taxes be assessed should they debate their assessment.

    I was told I could not use short sales or foreclosures to get my taxes reduced. However, can these new owners use the actual sales price of their own property as evidence that their tax value should be based on the their sales price? I can’t seem to get a straight answer from county and plan on calling state.

    Because of the Homestead Tax credit…then–these people’s base line will start much lower than mine….Similar to all the old timers in my neighborhood who have been here for 10 years or longer and bought when MR was considered a bad neighborhood. You could buy a house here at that time for oh…say 80K or 130K….so their baseline tax rate started much lower too.

    So here I am ….mortgage is upside down, I need to make improvements…and I pay and will continue to pay more taxes than others that bought before me or after me…and people wonder why people are walking away from mortgages.

    Can you say screwed?! Even if I sold my house at $300K..what about those closing costs…. My house on zwillow was listed as $186K…right.

    Any thoughts. And I did do a mortgage restructure at a lower interest rate but did not address principal. And Bank of America kicked that back into the principal of the mortgage along with though they reduced the % on a sliding scale that will cap at 5%-they did me no real favors when you look at the big picture and the helping hand they got from the government.

    I feel like I am imprisoned by this house–and really am beginning to hate it.

    From a moral standpoint, I don’t want to walk away. Plus I like me neighbors. But financially, this house is now a very bad financial decision that I am paying the price for–yet BAC made many bad financial decisions and was rewarded with profits and bail outs.

    Any thoughts as to what I should do?

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