Decoding Real Estate Tax Assessments: What You Need to Know

This is an important post addressing the latest real estate tax assessments in Montgomery County. As you may know, the State Department of Assessments and Taxation (SDAT) sends out property assessments every three years. The new assessment cycle has just started and notifications were sent out in December 2022 for the next fiscal year which begins July 1, 2023. If you own a property, you probably already received it.

Some of our clients have already contacted us regarding the new assessments, noting a considerable increase in their tax assessment, and asked for help in producing sales data in order to appeal the assessment. As always, we are happy to assist in any way we can.

Here are a few very important factors to keep in mind as you review your recent tax assessment.

1. Property Values Increase:

To give you a sense of real estate value appreciation in the last three years, we examined median and average home prices (closed transactions) in the month of July 2019 vs July 2022 for single-family homes (note that condos have NOT appreciated at the same rate), in Bethesda and Chevy Chase: * this is only an anecdotal stat to illustrate a point, not to be confused with the methods by which the county assessed property values.

Bethesda:

July 2019 Median Sale Price: $929,500 – July 2022: $1,415,000
52% higher;
July 2019 Average Sale Price: $1,158,500 – July 2022: $1,698,000
46% higher

Chevy Chase:

July 2019 Median Sale Price: $1,210,000 – July 2022: $1,625,000
34% higher;
July 2019 Average Sale Price: $1,349,000 – July 2022: $1,751,000
30% higher

2. Homestead Tax Credit:

Homestead status is afforded to homeowners of primary residences, it cannot be obtained for investment properties or second/vacation homes. Homestead has two main benefits: A credit on the property tax bill equal to $692, and, more importantly, it puts a limit on the increase in taxable assessment each year to a fixed percentage of 10% per year. If you do not have Homestead and believe you qualify, you can click here to learn more about eligibility and applying for it.

3. The Appeal Process:

If you do not agree with your tax assessment, you can appeal it by contacting the Montgomery County Property Tax Assessment Appeals Board, click here for the board’s contact information. Successful appeals typically include a well-prepared analysis of relevant and current data that can be presented to the board.