Some Marylanders will see bigger tax bills in 2023 after a sharp rise in assessed property values

Property tax assessments in Maryland are catching up to the state’s tight real estate market, which saw soaring prices during the coronavirus pandemic.

That means many Marylanders will see a sizable bump in their property tax bills in the coming years. The total assessed value on residential and commercial property around the state rose 20.6%, according to the State Department of Assessments and Taxation, or SDAT.

While assessed property values have been increasing for the past decade, the 2023 reassessment is the biggest increase in recent years. In 2022, for instance, the total increase was 12%. In 2021, that number was even smaller at just 8.1%.

These are not year-over-year increases in property value. Maryland reassesses properties every three years on a rolling basis, meaning some properties haven’t been reassessed since before the pandemic — and before the hottest housing market in more than a decade.

The average statewide assessments on residential properties increased 22.2% and assessments on commercial properties increased 15.8%, according to SDAT.

In Baltimore City, average assessments for residential and commercial properties rose by 24.3% and 18.8%, respectively. In Baltimore County, those average increases were 17.7% and 13.2%.

Any time a property is sold in Maryland, the state takes a look at the deal and assesses how much the property is worth. That new assessment is then used to calculate the property tax bill.

But if a property hasn’t sold recently, the state will update its assessed value every three years, explained Michael Higgs, the director of SDAT.

Each county in Maryland is split like Neapolitan ice cream into three assessment zones, Higgs said, except instead of chocolate, vanilla and strawberry, there is Group 1, Group 2 and Group 3. Each year, his agency takes a spoonful out of one of those flavors and examines a variety of factors to calculate how much each property is worth.

The agency looks at the size of buildings, nearby property sales, the number of rooms and bathrooms, Higgs said, as well as the quality and desirability of the area. Almost every year, the ice cream tastes sweeter than it did three years prior. The last time it didn’t was the aftermath of the Great Recession, when the housing market collapsed and the ice cream tasted bland for a few years.

This reassessment for 2023 affected properties in Group 2. A map of properties covered by Group 2 can be found on SDAT’s website. Property tax bills don’t get sent out until July, Higgs said, and homeowners have 45 days to appeal their assessment if they disagree with the new valuation.

Many homeowners won’t feel the pinch immediately. The state caps annual property tax increases at 10% and many local governments have even smaller caps, according to SDAT. Eligible homeowners can also get some relief through the Homeowner’s Tax Credit and the Homestead Tax Credit.

Similar to last year, every county plus Baltimore City saw an increase in overall property value. The biggest jump was in Garrett County, where residential property values increased by 53.9%. Garrett County is located in the state’s panhandle and it is one of the state’s smallest counties by population, with fewer than 30,000 residents. Higgs explained that the jump in property value there is largely attributable to new home sales around Deep Creek Lake.

“Once COVID hit, people were moving out of the cities and suburbs and looking to remote work out in the peace and quiet countryside,” Higgs said of Garrett County. “And we saw values rise very quickly.”

Even as rising mortgage rates are putting a damper on the housing market nationwide, Higgs said he doesn’t expect property values in Maryland to decrease.

“Maryland’s housing market is extremely strong. Demand remains high,” Higgs said. “And there’s not much in the way of new supply coming on to ease the demand pressures.”