Being aware of and understanding the appeal process can ultimately save Maryland property owners and investors money and ensure they are paying only their fair share in real estate taxes. Real estate taxes can fluctuate based on the current market value of residential and commercial properties. The state’s Department of Assessments and Taxation conducts these assessments every three years in Maryland.
When property owners receive their notice of assessment, they often feel the department’s initial assessment is incorrect. Structural changes and property conditions can vary drastically since the last assessment was published. In this case, the owner has the opportunity to dispute the value determined by the department.
Since properties are assessed every three years, owners can potentially be taxed on properties based on their condition several years prior. Owners have the option to file an appeal on three occasions. The first occasion is upon the receipt of an assessment notice. The second is known as an ‘out of cycle’ that can be filed during the second or third year between property assessments. Lastly, owners can file an appeal when a property is purchased between January 1 and June 30. Appeals must be filed within a 60-day window either through a personal hearing, phone hearing or written appeal. (Appeals made in writing eliminate the need for an actual hearing, but they may not be as effective.)
Through understanding the appeal process, and following the guidelines, the outcome can result in property owners saving thousands of dollars each year.
The first level of the appeal process is known as the supervisor’s level, which must have been filed by Feb 12. This is an informal hearing with an assessor from the supervisor of assessments. After the hearing, you will receive a final notice. If you disagree within 30 days you can appeal to the next level, which is to the Property Tax Assessment Appeals Board.
The third and final level, Maryland Tax Court, is available after the appeal process comes to an end. This process is more formal and all appeals must be filed within 30 days of the date of the PTAAB order. After the final level, property owners who do not agree with the MTC can appeal through the court system.
While the appeal is in progress, property owners are still required to pay the original tax bill. The property owner is due a refund with interest if any changes result from the proceedings.
It is recommended for property owners to consult with a tax appeal representative, who can serve as a useful resource throughout the process. Oversights and miscalculations are common in just the initial tax assessment due to unknown property conditions or significant market changes. These could cause you to pay higher taxes than necessary even before an appeal is filed. Tax appeal representatives have access to comparative sales data, rental rates per square foot and vacancy rates for residential and commercial properties — all resources that can help save property owners money in the long run.
Rory S. Coakley is founder and president of Rory S. Coakley Realty, Inc., a full service real estate firm in the Washington metropolitan area specializing in sales and leasing, property management, tax appeals, appraisals, and litigation support. He can be reached at firstname.lastname@example.org.