SNOW HILL – Some property owners have opened their mail recently to find a higher property tax bill than they hoped for, and they are making their displeasure known.
“Our phone’s been ringing off the hook,” Worcester County Treasurer Harold Higgins reported to the County Commissioners recently.
Many property owners have seen the assessed value of their property go down in light of the flat real estate market.
No official reassessment has been done on two thirds of the county, a third of which is reassessed every year, in a three-year cycle.
Property tax bills have gone up for some, however, and many of those property owners are demanding answers from elected officials and staff.
In most cases, it is those homeowners claiming the Homestead Tax Credit, which restricts how much and how fast a tax bill can increase in light of higher property value assessments, who are seeing an increased tax bill this year compared to last.
Higgins explained that the Homestead Tax Credit’s three-year phased-in payment structure is the reason many homeowners will pay a higher tax bill this year as compared to last year. The current market value of a property has nothing to do with the tax bill until the property is reassessed by the state.
When a property’s tax assessment value increases, homeowners using the property as a primary residence can claim the Homestead Tax Credit, which in Worcester County, Ocean City, and Snow Hill is 3 percent. Berlin has a 5-percent homestead tax cap, and Pocomoke City uses the state limit of 10 percent.
The tax credit limits increases in the taxable portion of the assessment by a fixed percent.
Taxes on that fixed percent of increase are then phased in over the three-year assessment period, going up each year, in order to reduce any sudden impact of the increased tax bill.
“When prices plummet, you’re still responsible for the 3-percent increase,” said Higgins.
County Commissioner Virgil Shockley said that’s a common misconception.
“People do not understand that,” said Shockley, who added he received his first constituent complaint over an increased tax bill at 6 p.m. on the Friday he received his own property tax bill.
“Until you [officially] go below what you were raised at, your taxes aren’t going to go down,” said county attorney Sonny Bloxom.