In a housing market beset by slower sales and higher mortgage rates, most Marylanders should see little, if any, increase in property assessments this year.
That's the call by state officials, who on Friday will mail 590,000 notices showing estimated market values used to calculate property owners' taxes over the next three years.
Last year, for the first time in decades, the average annual valuation remained even with that of the previous year. The department expected a slight increase in valuations, on average, this year though no final estimates were available last week, said Ronald W. Wineholt, acting director of the state Department of Assessments and Taxation.
More than anything, market conditions drive changes in assessments, Mr. Wineholt said. This year, assessments should reflect plummeting sales and level or falling property values in many neighborhoods.
In the late 1980s, average valuations increased anywhere from 17 percent to 28 percent. The average increase in 1990 of 42 percent was the highest in the past 10 years. It has declined each year since.
"What had been rapid appreciation in the market value over the late 1980s slowed down quite a bit the past several years," Mr. Wineholt said. "The past several years, the change in property values has been fairly minimal."
Since 1991, property owners have been taxed on increases of no more than 10 percent per year. Eight counties have annual tax caps of less than 10 percent.
As assessment increases have shrunk, so has the number of appeals. In 1994, 35,000 property owners challenged their assessments, a number that has declined since 1991, when 67,000 appealed, Mr. Wineholt said. In the past few years, about 20 percent of those who appealed to the tax assessment office have taken their challenges to the Property Tax Assessment Appeal Board, the second level. Fewer than 20 percent of them continued to the Maryland Tax Court, the third and final level of appeal besides a lawsuit.
Property owners who get tax notices this year have until Feb. 13 to appeal. The state reassesses about a third of Maryland properties each year.
Though slight assessment increases cause less of an uproar among homeowners, and lead to fewer appeals, misconceptions about the assessment process are at the root of some appeals every year, Mr. Wineholt said.
"When people see their assessment notice, they think the purpose of the reassessment is to increase the property taxes on their property," Mr. Wineholt said. "But it is to make sure every property is valued correctly. It may be higher or lower."
Homeowners sometimes mistakenly believe that the state is projecting their property's value over three years, rather than phasing in increases. Homeowners also often think assessments increase as a matter of course, he said. But last year, just more than half of the property owners had no change or a decrease in their assessments, he said.
A call to arms
But homeowners never should just accept the state's determination of value without question, said Harold Christopher Lloyd, chairman of Taxpayers United, a Baltimore-based group that represents homeowners throughout the appeals process.
Mr. Lloyd urges all homeowners to request a copy of the work sheet their assessor used in determining value, regardless of whether they suspect errors.
"We find mistakes in perimeter, dimensions -- they might have you down for more bathrooms than you have, for a fireplace you don't have for a clubroom you don't have," he said. "Mistakes are very common. They're not common because [assessors] are careless. They're common because of the volume."
Mr. Lloyd charges that the assessment system itself is flawed and gives homeowners a raw deal.
By evaluating a home based on recent sales of comparable properties in the neighborhood, the state fails to take into account the sellers who took their homes off the market when they couldn't get fair market value, Mr. Lloyd complains.
"There should not be inordinate increases based upon someone else's transactions," he said. "Assessing is a mass appraisal system, not an individual appraisal but a mass approach. They compare you to someone else, and they presume and make assumptions that may or may not be true."
Homeowners planning to dispute the state's value estimate -- based on changes in the real estate market and changes to the home from the time the property was last valued -- must sign and return the appeal form within 45 days of the date of the notice. A homeowner can request a telephone or personal hearing or can appeal in writing.
Homeowners should request a copy of their work sheet, free of charge, from their local assessment office.
At the first level of appeal, a homeowner presents his case to an assessor, offering evidence to show the department's value is inaccurate.
The assessment department offers these tips:
* Focus on points that affect the value of your property.
* Indicate why the total new market value does not reflect the market value of the property.
* Identify any mathematical errors on the work sheet or inaccurate information describing characteristics of the property, such as the number of bathrooms and fireplaces.
* Provide examples of sales of comparable properties that supportyour findings concerning the value of the property. Sales data can be obtained from listings in the local assessment office, commercially available sales reports at local libraries, local real estate offices and newspapers' local listings of sales transactions. For a fee, work sheets of comparable properties may be obtained from the assessment office.
* Avoid issues that are irrelevant to the value under appeal, such as comparison to past values, percent of increase or additional metropolitan costs.
The department will issue a final notice after the hearing. If a homeowner disagrees, he can appeal to the appeal board within 30 days of the final notice.