BERLIN – State property value reassessments announced this week revealed significant increases across Maryland but in Worcester County, the changes were even more pronounced.
The State Department of Assessment and Taxation (SDAT) this week announced the results of the triennial reassessment of residential and commercial properties across Maryland and the news was generally good, depending on one’s perspective. Each year, about one third of residential and commercial properties around the state are reassessed and assigned new values, which are used to determine property tax liabilities.
For property owners, the reassessments can either be good news or bad news depending on one’s situation. Higher reassessments could mean higher property tax liabilities, but also means one’s home or business is increasing in value. For local governments, higher assessments mean more revenue dumped into local coffers that can ease strained budgets or provide more funds for essential services.
This year, using the geographic formula that divides Worcester County into three relatively equal parts, all of the residential and commercial properties in Group 2 were reassessed. Group 2 includes much of the south end of the county including Snow Hill and Pocomoke along with outposts such as Stockton and Girdletree, for example. In order to make the reassessment areas fairly equal, Group 2 also includes areas in West Ocean City and South Point, for example, on the south end of Route 611, and some commercial properties in Berlin.
Statewide, residential properties reassessed across Maryland saw their values increase by an average of 22%. In Worcester, the increases values in residential properties were even more pronounced, coming in at an average of around 35%. In neighboring Wicomico County, the average increase in residential property reassessments was around 30%. Surprisingly, topping the state residential property reassessment value was Garrett County in western Maryland, which saw its average residential property values increase by around 54%.
On the commercial side, the gains were significant in terms of increased values, although less pronounced. For example, across Maryland in the reassessment areas in the current cycle, commercial properties saw their values increase by an average of 15%. In the reassessment area in Worcester, commercial properties saw their values increase by an average of 14%. In Wicomico, commercial properties saw their values increase by an average of 12%. Topping the state in terms of commercial property value increases was Cecil County at 36%.
Statewide, the combined increases in reassessment values for residential and commercial combined was around 20%. In Worcester, the combined increases were about 31%, while Wicomico came in at around 24% combined. Garrett saw the biggest gains in combined assessment increases at around 50%. All in all, the figures represent good news in terms of property values statewide and locally and reflect a resurging post-pandemic real estate market despite current concerns about inflation and other market fluctuations.
“All 23 counties and Baltimore City experienced an increase in residential property values for the fifth consecutive year, while commercial property values increased in all 23 counties and Baltimore City,” said SDAT Director Michael Higgs. “This is a good indicator that the market remains strong, and growth is steady here in Maryland.”
Properties reassessed locally and across the state typically see their values increase or decrease across the board for a variety of reasons, but the numbers released by SDAT this week show the rate of increase was fairly consistent and even spiked in many cases. For example, of the 10,760 properties reassessed in Group 2 in Worcester during the current cycle, 96% saw their values increase. The statewide average was 96%, but over in Wicomico, around 99% saw their values increase during the current reassessment cycle.
Perhaps more telling is the full cash value of properties in the reassessed areas during the current cycle. For example, in Worcester, residential properties saw their full cash value increase from around $2.4 billion to nearly $3.3 billion. Combined, residential and commercial properties saw their total cash values increase from around $3 billion to $4 billion. That represents an increase of around 30% and suggests an increase of about $1 billion into the county coffers. Similar figures played out in Wicomico and across the state.
The SDAT figures released this week show a continued increase in property values in the assessment areas in the current cycle statewide and locally. For example, Worcester County saw steady declines in property value assessments for a five-year period beginning in 2010, but the numbers have slowly but surely increased by degrees in recent years with the spikes even more pronounced in recent cycles.
For example, in the last reassessment cycle in Worcester last year, that included much of the north end of the county including Berlin and Ocean Pines, the rate of increase was 16%, or right around the state average. This year, the property values in the reassessed Group 2 went up by a rather remarkable 31%.
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.”
