Harford Property Tax Revolt

When discussing the Property Tax situation in Maryland, and specifically in Harford County, it is important to look at how the taxes are levied. Specifically, the three components of the tax are as follows:
1. Tax rate
2. Property Tax Assessment
3. Homestead Tax Credit Cap rate


-TAX RATE-
Each tax rate is set by the taxing district. This could be the County or the municipality, or both, depending on where you live. Every year the County executive (and each Mayor) is informed by Annapolis a tax rate that if levied on everyone, would bring in the same total tax revenue. This number is called the Constant Yield Rate. Instead of adopting this year's rate of $.994 per $100 of assessed value, County Executive Craig decided to raise the tax rate tp $1.082 per $100. This rate is different for those in Havre de Grace, Bel Air, or Aberdeen, as they are double taxed for living within the town limits. The tax rate is multiplied by the Property Tax Assessment to come up with the taxes due.


-PROPERTY TAX ASSESSMENT- 
The Property Tax Value Assessment really, really needs to be reworked in Maryland. 
Currently, the taxable value of your home is set not at the market price of the home but at the replacement value. That is, if your home were to burn down tomorrow, the cost to replace it is similar to the assessment. 
The assessments have very little if any basis in reality and they are big pain in the butt to appeal. For more information about this, please contact Mr. Whitely at MDFairTax (at) juno.com .


-HOMESTEAD TAX CREDIT CAP RATE-
In the state of Maryland, a homeowner's taxes due are limited to growth of 10% per year. That is, the tax bill will never increase more than 10% anywhere in the state, by law.
This is independent of the Assessment process, so that if your assessment increases 20% in one year and the tax rate stays the same, your taxes will only increase 10%. 
In Harford County, this rate is currently limited to 9%. So if your property tax bill is $1,000 in 2008, in 2009 the highest the bill could be is %1,090, then in 2010 $1188.10. etc. This means that your property tax bill will double every 8 years.

Now, on July 14 at the County Council meeting, the Council is going to vote on whether or not to decrease this HOMESTEAD TAX CREDIT CAP RATE from 9% to 5%, limiting the amount that the taxes on your primary residence can increase every year. 


Mind you, this doesn't apply to second homes, commercial property, or apartments. That is something to look forward to in the future :)


I hope that you will join us to wave a sign and show our support for them to make the right decision in this.


If you are interested, join us at 6:00 at the Council Chambers on Tuesday, July 14, 2009!