Property owners in the state of Maryland are levied state and local (city or county) property taxes annually. The Maryland State Department of Assessments and Taxation (MD SDAT) determines the property value assessment, and the city or county is responsible for billing and collecting the taxes. The state of Maryland has 23 counties, the city of Baltimore itself and another 155 cities that levy and collect property taxes. Property taxes generated $13.2 billion or 58% of local government revenues in 2015. Taxes are based on three-year property assessment values determined by the Maryland State Department of Assessments and Taxation (MD SDAT), though charitable, religious, educational and government properties are exempt from taxes. Counties and cities are free to set tax rates as needed in order to fund government services. Under the homestead property tax credit, any annual assessment that is greater than 10% is not taxed for owner-occupied residential property.

Average Property Taxes

The Maryland State property tax rate is $0.112 for every $100 of assessed property value, which has been effective since July 1, 2015. City and county property tax rates are applied to generate the total property tax bill. The local real property tax rates range from $1.20 to $0.536 for every $100 of assessed property value. Charles County has the highest property tax rate at $1.205, followed by Frederick County at $1.06 and Hartford Country at $1.042 per $100 of assessed property value. Talbot County has the lowest property tax rate of $0.536 for every $100 of assessed property value.

According to the Zillow.com home value index, the median home value in the United States is $186,200, which is up 4.7% annually. Median home values for the Northeast region rose 1.8% year-over-year (YOY) to $249.400 in the first-quarter of 2016, while median home values for the South region including Maryland, rose 5.8% to $192,100 in the first-quarter of 2016. Applying the median $192,100 value to Montgomery County, Maryland, results in an annual property tax bill of $1,794 compared to the national average property tax bill of $2,326 for the same value property. This is a discount of 22.8% compared to the national average.

National Property Tax Rate Comparisons

The national average property tax rate is 1.211%. According to Taxfoundation.org, the mean effective property tax rate on owner-occupied housing in Maryland is 1.10%, which ranks 22nd out of all U.S. states from highest to lowest property tax rates. New Jersey holds first place with the highest property tax rate in the nation at 2.38%, followed by Illinois in second place with 2.32% and New Hampshire in third place with 2.15%. The nation's lowest property tax rate is Hawaii's 0.28%, followed by Alabama's 0.43% and Louisiana's 0.51%. States with higher property taxes often balance with lower taxes in other categories and vice versa, with lower property taxes offset with higher taxes in other categories.

Neighboring States

Maryland has the second-highest property tax rate among its neighboring states, trailing behind Pennsylvania. The property tax rates and ranking for Maryland's neighboring states nationwide are as follows: Pennsylvania at 1.54% in 13th place, Virginia at 0.78% in 37th place, West Virginia at 0.59% in 45th place, the District of Columbia at 0.57% in 46th place and Delaware at 0.55% in 47th place.

Conclusions

Maryland property tax rates are around the middle range for the United States. In comparison to some of the most expensive states, such as New Jersey, where the median home value of $307,700 results in a tax bill of $7,331, Maryland rates are quite reasonable. The same $307,700 home in Maryland would receive a $3,339 property tax bill, a discount of 54.5%. A Maryland property tax bill would still have a 27.4% discount compared to neighboring Pennsylvania's property tax of $4,604 for the same property.

Mississippi Property Tax Guide

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