BERLIN — Buoyed by a surging real estate market, property values in the north end of Worcester County spiked considerably since the last reassessment, exceeding state average gains.
The State Department of Assessment and Taxation (SDAT) this week announced the results of the triennial reassessment of residential and commercial real estate values across Maryland and the news was generally positive. Each year, about one-third of the residential and commercial properties around the state are reassessed and assigned new values are used to determine property tax amounts.
For property owners, higher reassessments mean higher property tax bills. For governments, more tax revenue is dumped into the coffers unless tax rates are adjusted down.
This year, using the revolving geographic formula that divides Worcester into three relatively equal parts, all residential and commercial properties in Group 1, or essentially the northern portion of the county, including Berlin and Ocean Pines, for example, were reassessed. The figures released by SDAT this week revealed significant gains in property values in the area reassessed this year statewide and locally.
Statewide, residential properties reassessed this year saw their values increase by an average of 12%. In Worcester, residential properties in the north end of the county saw their values increase by 20%, while in neighboring Wicomico, values increased by 22%. Only Charles County exceeded the gains realized in Worcester and Wicomico, coming in at 27% for the reassessed area in that jurisdiction.
On the commercial side, statewide, commercial properties reassessed in the current cycle saw their values increase by an average of 10%. In both Worcester and Wicomico counties, commercial properties reassessed in the current cycle saw their values increase by an average of 6%.
Statewide, the total average increase of residential and commercial properties reassessed increased by 12%. In Worcester, the combined residential and commercial properties increased by an average of 16%, while Wicomico saw its combined residential and commercial property values increase by an average of 18%.
“All 23 counties and Baltimore City experienced an increase in residential property values for the fourth consecutive year, while commercial property values increased in 22 counties and Baltimore City,” said Maryland SDAT Director Michael Higgs. “This is a good indicator that the market remains strong and growth is steady here.”
Among the 14,588 residential properties reassessed in Group 1 in Worcester County in this cycle, 14,067 saw their values increase, representing 96%. In Wicomico, similar numbers bore out with 97% of properties recording increased values.
More telling is the full cash value of properties in the reassessed areas in both counties. In Worcester County, combined residential property values increased from $3.8 billion to $4.6 billion. The full cash value of commercial properties in the reassessed area in Worcester went from $1.3 billion to $1.4 billion in the current cycle. In Wicomico, the full cash value of residential properties in the reassessed area went from $1.5 billion to $1.8 billion, while the commercial values increased from $486 million to $514 million.
The SDAT figures released this week reveal a continuing trend of growth in property values over the last decade or more. For example, in Worcester County, combined property values in Group 1 dropped by 20% in 2010, followed by another drop of 14% in 2013. In 2016, Worcester County properties in Group 1 turned the corner in terms of value with an increase of 9% and the same held true in 2019. This year, combined residential and commercial properties in Worcester increased by 16%.
In Wicomico, the combined reassessed value of residential and commercial properties fell by 16% in 2010, followed by another drop of 17 percent in the next cycle in 2013. After that, Wicomico’s combined property values in that county also turned a corner and jumped by a modest 3% in 2016, 11% in 2019 and 18% in 2022.
Despite the significant increases in values, primary resident property owners in the reassessed areas in Worcester and Wicomico Counties should not expect a major spike in their annual property taxes. Primary resident property owners across the state are projected somewhat from major increases by the Homestead Tax Credit and jurisdictions set their own rates.
In Worcester, for example, the assessment cap is set at 3%, meaning primary residents in the assessed area are only susceptible to an increase of 3% in their property tax, regardless of how much their property value increased. In Wicomico, the assessment cap is set at 5%. In Ocean City, which was not reassessed in the current cycle, the Homestead Cap is set at 0%, meaning primary resident property owners in the resort would not pay higher municipal property taxes regardless of whether or not their reassessed values increased. Higgs said protections against exorbitant single-year property tax increases save primary residents in Maryland millions each year.
“The department’s real property assessors continue to work hard to ensure that all of Maryland’s properties are assessed uniformly and fairly,” he said. “As part of our tax credit awareness campaign, each reassessment notice include information about the homeowners’ and Homestead Tax credits, which save Marylanders more than $260 million each year.”
Charts detailing the numbers can be found here.
