Posted on 02/28/24
| News Source: FOX45
Baltimore, MD - Feb. 27, 2024 - The first round of post-pandemic property assessments has Baltimore City residents bracing for higher tax bills.
Maryland tax officials are reporting a 23% overall increase in property values since the last assessment period in 2021. It’s the largest increase recorded in a decade, and it’s especially taxing on Baltimore City residents who already face the highest tax rates in the state.
At 2.248%, city residents pay twice the price of those in surrounding counties. The tax rate is 0.9779% in Howard County, 0.98% in Anne Arundel County, and 1.1% in Baltimore County.
For first-time home buyer, Syeda Jaffery, she was shocked when she received her new assessment in the mail.
“How am I going to afford it?” she questioned.
Jaffery purchased a three-bedroom rowhome in Baltimore’s Canton neighborhood last October. Due to low inventory and soaring home prices, she admits to feeling rushed when paying $510,000 for a home that sold for just $320,000 four years prior.
“You’ve been hearing since COVID, buy now, buy now!” she said, “Just do it, if you like the house, just go for it make the offer.”
Although Jaffery claims the house hasn’t had any major renovations since 2005, she expected the price she paid would have a significant impact on her 2024 reassessment. However, she never expected to receive two separate assessments with two very different values.
In December she received an initial assessment which raised her property’s value 17%. A significant increase, but it was on par with what she budgeted for. About a month later, she received a second assessment from the state, this one, raising her property’s value 67%.
She immediately appealed the decision and applied for a tax credit program which should soften the financial strain. Baltimore City also limits the increases on taxable assessments to 4% annually.
"Based off of the numbers that I saw, it's going to be a few $1,000 more once it actually reaches the value that they've assessed," Jaffery estimates.
Had she been more educated on the pending property assessment and high tax rate, Jaffery says she would never have purchased a home in Baltimore City in the first place.
“Absolutely not. I would not have because I think I don't get the same value for what I’m paying,” she said “My friend bought a home in Baltimore County, literally, 15 minutes away, and her home is the same value as mine and she's paying $4,000 in taxes and I'm paying $8,000 in taxes.”
According to the State Department of Assessments and Taxation, in December the value was based on a 2015 building permit. It’s unclear why more accurate evaluation wasn’t sought over the last 9 years. An SDAT spokesperson claims the second notice, “was revalued based on the new information available and mailed a supplemental notice reflecting a value more in line with the sale price.”
“It's a city that loses around 7,500 to 8,000 people a year already,” said local economist, Anirban Basu.
Predicting housing prices will remain inflated for the foreseeable future, Basu warns the city’s current exodus could accelerate.
“More and more people are going to say I cannot afford to live here anymore, I'm leaving,” he said.
Hoping to keep that from happening, Basu has joined a grassroots effort to cut the city’s property tax rate. The group Renew Baltimore is proposing a petition to put a question on the November Ballot, that if approved, would slowly lower the city’s property tax to 1.20% by 2031.
The petition failed to gather enough signatures to make it on the ballot in previous years, but Basu says this latest round of soaring property assessments makes the measure more critical than ever before.
“We think that will stimulate an economic boom. A lot of people might say, well, we're going to reduce services with those lower property tax rates. No, no, because again, the assessed values are rising so quickly and you will see investors come into the city aggressively and take some of this vacant housing and make it livable,” said Basu.