Information on Real Estate Taxes

Real estate taxes are determined by the amount at which the State of Maryland assesses a home's value. The state assessment is not directly comparable with the market value of a home. In our neighborhood, the state assessment value was lower than the market value until the economic conditions caused it to flip in 2009.

The state assesses values of properties on a three year cycle. The state reassessed our property values in 2008, and notified us by mail of the total assessed value (land and building) in January, 2008. The assessments are phased in over a three-year period, so that is why the amounts for 2008, 2009, and 2010 are different (and higher) each year.

Because our homes were reassessed, all of us have seen higher county and state real estate tax bills, even though the rate of tax remains consistent from 2008 to 2009. Since for many of us, the property tax amounts increased by 10% over the amount charged last year, that's why most (not all) homeowners in Bel Pre Estates will continue to see homestead credits applied to our tax bills as long as our tax increase exceeds the annual cap of 10%.

For most owners whose property assessments have skyrocketed, "Homestead Exemption" tax credits for a home that is your principal residents are available, but not automatically applied as they once were in years past. In order to get this credit, you have to fill out an application form and mail it back to the state. This form was included in the January, 2008, property assessment notice. If you did not get it or did not file the form, click here for more information and to get the form.

Homestead tax credits are applied when the total amount of the tax exceeds 10% of last year's tax bill on three lines: the state property tax, the county property tax, and the special area tax.

1. State Homestead Credit: applied to the amount of tax that is more than 10% of the state property tax on your bill last year.

2. County Homestead Credit: applied to the amount of tax that is more than 10% of the county property tax on your bill last year.

3. Special Area Homestead Credit: applied to the amount of tax that is more than 10% of the special area property tax on your bill last year. (Every part of the county is in some "special area." Some "special areas" have higher taxes, such as downtown Wheaton, Silver Spring, or Bethesda. Our "special area" tax is about in the middle compared with other areas of the county.)

We also got a one-time property tax credit of $690.00 for tax-year 2009. The Montgomery County Council gave everyone this one-time credit and also did not increase the overall tax rate since 2007. The tax rate imposed by the state in 2007 was 0.112% and the county's tax rate was .916% of the assessed value.

Real estate taxes are divided into two payments, one due by September 30, and the other by December 31, 2009. Information on where and how to pay tax bills is on the county's web site. If you have a mortgage company withhold money in escrow to pay taxes, make sure that you send a copy of your tax bill to your mortgage company so they will pay it and, if necessary, adjust your monthly escrow so the right amount of money will be withheld for your tax payments.

Click here for more information about homestead credits from the State of Maryland Department of Assessment and Taxation.