North Four Corners News ♦ February 2023

Understanding Your Property Tax Assessment Notice

By Linda Perlman

Every homeowner in the NFCCA area should have received an Assessment Notice reappraising their home as of 1 January 2023.  This reassessment establishes a New Market Value of the home, divided into a land value and a building value, for purposes of property taxes.  Houses are reassessed every three years by the State of Maryland Department of Assessments and Taxation.  If the Total New Market Value of your home increased over the old total market value (from 1 January 2020), then the increases in the New Market Value are applied in equal installments over the next three tax years.  This is shown as the “Phased-In Market Values/Assessments” on the Assessment Notice.

If the assessed property is your principal residence, then the Homestead Tax Credit — for owner-occupied houses — limits the increase in the taxable assessment to no more than 10 percent per year.  To benefit from the Homestead Tax Credit, your Assessment Notice (and property tax bill) must indicate that a Homestead Application has been approved or is pending and that the property is your principal residence.

To make the Assessment Notice easier to understand, let’s put some amounts on the Assessment Notice categories, using my Caddington Avenue home, as an example.

• 1.  The old (1 January 2020) total market value of my home was $339,900.
• 2.  The New (1 January 2023) Total Market Value of my home is $414,300.  This is a $74,400 increase in the market value of my home from 2020 to 2023.
• 3.  The Phased-In Market Values/Assessments applies one-third of the $74,400 increase in the market value of my house each year.  Thus, for 2023, $24,800 is added to the old total market value of my house, resulting in a $364,700 phased-in market value of my house ($339,900 + $24,800 = $364,700).
• 4.  Since the Caddington Avenue home is my principal residence and my Assessment Notice states that a Homestead Application has been approved, then the Homestead Tax Credit limits the taxable assessment (i.e., the value of the home that is subject to the property tax) for the 1 July 2023 property tax bill to 10 percent more than the old market value of my home.  The old market value was $339,900 + $33,990 (10 percent of the old market value) = $373,890, representing the maximum taxable assessment of my home for 1 July 2023, after the Homestead Tax Credit is applied.
• 5.  The Homestead Tax Credit is intended to help homeowners who are affected by high assessment increases by limiting the annual Taxable Assessment increase to 10 percent for principal residence homes.  For my home, one-third of the increase in the New Market Value is $24,800.  This $24,800 added to the old total market value of my home equals $364,700, which is the Phased-In Market Value/Assessment of my home for 2023.  However, since the maximum 2023 taxable assessment of my home under the Homestead Tax Credit ($373,890) is higher than the 2023 Phased-In Market Value/Assessment of $364,700, then the Homestead Tax Credit will not save me any money on my 1 July 2023, property tax bill.

If you believe that your home’s Total New Market Value is incorrect, then you can file an appeal of the Assessment Notice.  An appeal must be filed or postmarked within 45 days of the date of the Assessment Notice, or by 13 February 2023.  More information on real property taxation and how to appeal your Assessment Notice can be found on the back of the Notice or at www.montgomerycountymd.gov/finance/taxes or www.dat.maryland.gov (click on Real Property Valuation).

An earlier newsletter article on this subject, titled “Oh, Those Taxing Assessments,” was published in the February 2008 issue of the Northwood News [link below].

[Disclaimer:  This article is for general information only.  It does not constitute individual legal or tax advice.  Consult your tax advisor and/or the Maryland State Department of Assessments and Taxation for advice and further information.]   ■

Oh, Those Taxing Assessments