Rising Property Taxes
Housing prices may be going down but property taxes are rising. I received my property tax assessment from the state of Maryland and my property taxes have increased. So how can property taxes increase when property values are decreasing?
State tax collectors are catching up on the major boom in housing prices over the last 9 years. Tax collectors didn’t increase the value of homes to keep pace with the price appreciation that took place during the real estate boom. Tax collectors are just catching up to the rise in property values. For example, if your house increased in value by 50% over the last 10 years. You may have only seen your property taxes increase 5% a year over those 10 years. This is due to Homestead Property Tax Credits.
Homestead Property Tax Credits prevent homeowners from being hit with the full increase in property taxes in a single year. Homestead Tax Credits limit the amount of your property tax assessment to a fixed percentage. This percentage varies from state to state. In the state of Maryland, Homestead Tax Credits limit assessment increases to 10% each year.
This year you may have to submit an application to be eligible to receive a Homestead Tax Credit. Maryland used to automatically enroll you in the the program but this is no longer the case. Now you have to submit an application in order to be eligible to receive the tax credit. Any homeowner whose home is their primary residence is eligible for the tax savings. Many states offer Homestead Tax Credits, so check with your state to see if you are eligible.
