OCEAN CITY – Some of the confusion over who should receive separate property tax assessments on boat slips in Ocean City was cleared up this week when the director of the state assessment office for Worcester County laid out the reasoning for the seemingly random process.
Several boat slip owners in the resort have raised questions in recent weeks about why they have received assessment notices on their slips while their neighbors, often on the same canal or waterway, have not.
Worcester County Director of Assessment and Taxation Robert Smith attempted to clarify the muddy situation this week, explaining there is a logical reason for the disparity despite the apparent confusion.
According to Smith, there are several criteria in place for the assessment office to determine if a boat slip should be assessed separately from a residence and in most cases the determination is made by the proximity of the slip in question to the resident’s property lines. For example, in all single-family homes in Ocean City, the boat slip is included in the overall assessment of a property because the slip is adjacent and considered part of the whole.
The same holds true for many townhouses in Ocean City where the boat slip is attached or adjacent to the property line, according to Smith.
“In the single-family home example, or many townhouse examples, the property owner can walk out his or her back door and across their own property to access their boat slips,” he said. “In those cases, the boat slip is included in the overall assessment for the property because it is attached to it and is part of a whole.”
The confusion arises when a property owner owns or leases a boat slip that is not directly attached to his or her property. Most often, the situation occurs in condominiums where an owner has a slip that is not attached to his or her property. In those examples, the condominium owner often has to walk across common areas belonging to the association to access their boat slips.
Essentially, it boils down to the proximity of the boat slip to the residence. If the boat slip is attached to the property, its value is lumped into the assessment for the entire property, but if it is detached and can’t be readily accessed without leaving one’s property, than a separate assessment of its value is made and it is taxed accordingly.
“In the condominium example, a condo means you don’t own the land,” said Smith. “The slip is not connected to anything you own and a separate assessment for the slip has to be prepared.”
The issue arose recently when a resident on Tern Drive, Charlie Brinkman, received a separate assessment for his boat slip while many of his neighbors on the same canal did not. Brinkman appealed the assessment to no avail and it considering taking his appeal to the next level, which could mean tax court. Brinkman said he was prepared to just pay the assessment on his boat slip before checking with neighbors to find out if they were also assessed for their slips.
“At this point, I felt that I would have to pay the assessment,” he said. “When I was discussing the situation with some of my neighbors who reside on the same canal, I found out they were not subject to this boat slip assessment. On further investigation, I found that 27 percent of the boat slip owners on my canal were not under this boat slip assessment.”
While it remains uncertain what the circumstances are for each of the individual boat slip owners on the same canal as Brinkman, it is likely an example of the different types of ownership explained by Smith. For example, Brinkman’s situation could be different from his neighbors’ directly next door or across the canal on the other side, depending on whether it is a condominium with common elements or a single-family home or townhouse where the slip is attached to the property.
In Brinkman’s example, while he does own the residence and the boat slip, the two were not separated when he settled on his property and he does not have a separate deed for the boat slip. Consequently, he cannot sell or lease the boat slip independently of his residence, but he still has to pay a separate assessment for the slip.
Smith said assessments of boat slips became necessary when it was evident many slip owners were selling or leasing them to boat owners outside of their condominium or even their neighborhoods. Assessors from his office spent a full year cataloging the countless slips in Ocean City by walking the properties, taking pictures, making diagrams and, when possible, interviewing property owners about their individual situations.
In either example, Smith assured property owners they were not being unfairly taxed for their slips regardless of whether they received a separate assessment notice or not. He cited an example of a single-family home with a slip where the entire property was assessed for $300,000. In the example, the residence itself was assessed at $290,000, while the slip was assessed at $10,000.
Smith said assigning a value to a boat slip is determined in several different ways such as the width of the canal or waterway, the proximity of the slip to the bay or closed end of a canal, the width of the canal or the size of boat it can accommodate.
“There are practically as many different scenarios as there are slips themselves,” he said. “It’s complicated and we have to look at a wide variety of factors. We’re trying to take a closer look at it. We’re trying to track it, not control it.”