Real Estate Wonk: New property assessments in Md. -- and how to appeal them

December 08, 2010|By Jamie Smith Hopkins, The Baltimore Sun | Baltimore Sun reporter

From the Real Estate Wonk blog:

Assessed values are down an average of 22 percent on homes Maryland assessors just evaluated, about one-third of properties in the state.

The Maryland Department of Assessments and Taxation, which is announcing the details today as it mails out the notices, called it a record drop. (The group of homes reassessed late last year declined almost 20 percent on average.)

Here's the county-by-county breakdown in the Baltimore metro area:

Anne Arundel County: down 23 percent

Baltimore City: down almost 14 percent

Baltimore County: down about 18 percent

Carroll County: down about 20 percent

Harford County: down about 17 percent

Howard County: down almost 23 percent

Baltimore's drop was one of the smallest in the state. The city also had the smallest share of residential properties that declined in assessed value -- 74 percent, compared with 95 percent in the state overall.

Want to contest your property assessment? Here's how:

If you're part of the group that was just reassessed, you have until Feb. 11 to appeal. You can read up on the process -- complete with useful links -- by searching for a blog post from three years ago.

If you're not in the recently reassessed group (and two-thirds of properties aren't), you can contest your valuation, too. But you'd better hurry. Such out-of-cycle appeals, known as "petitions," must be postmarked by Jan. 3. (The official deadline is Jan. 1, but as it's a holiday, state assessors told me that they'll accept postmarks for the following business day -- next Monday.)

Here are more details on petitions, and here's a petition success story.

As the appeal posts note, the key is to arm yourself with sale data on comparable homes. Some of you have asked whether foreclosures and short sales are considered "comps" by state assessors, and the answer is "it depends."

Such distressed-property sales aren't normally treated as arms-length transactions for assessment purposes. But these are hardly normal times. Robert Young, acting deputy director of the state assessments department, said short sales and foreclosures resold by banks are used as comps for assessments in communities where these transactions are a significant part of the market.

So if you're appealing your assessment in a neighborhood where distressed sales are few and far between, make sure you're not building your case around just those few-and-far-between sales.

"An isolated short sale is not the best argument to make," Young said. "You want to talk about the other sales that are arms-length."

Also remember: A successful appeal will only cause your property-tax bill to drop if the assessed value falls below the amount you were actually paying taxes on before. Thanks to the Homestead tax credit for owner-occupiers, a lot of people are paying taxes on a fraction of their total assessed value. (In Baltimore, for instance, the amount of assessment that homeowners pay taxes on can't increase more than 4 percent a year.)

As it happens, that means some of the newly reassessed property owners will see a bigger tax bill come July despite the lower assessed value -- because there will still be a gap between the full assessment and the portion they're taxed on.

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