In the past couple of weeks, you have probably all received an Assessment Notice from the Maryland State Department of Assessments and Taxation (SDAT). As you noted, the phased-in assessed value of your lake area property will increase dramatically over the 2023 – 2025 assessment phase-in period. There is a bit of “sticker shock” among property owners because of this notice.
The assessment alone does not mandate an increase in your property taxes, but the process is somewhat complicated and is partly dependent on actions by the State and partly by Garrett County.
Your POA Board will closely monitor the progress of this issue and advocate on behalf of POA members to urge the Garrett County Commissioners to set the real estate tax rate at a reasonable level and not create an unjustified windfall of tax revenue.
The purpose of this eBlast is to provide members with objective information about the assessments and the process to help you make informed decisions about your proper course of action if any. We are not attempting to provide members with legal or any other advice as to the proper course of action but solely to help members understand the process. This information is all gathered from publicly available governmental documents, and any decisions by individual homeowners should be guided by those documents and your own advisors.
This eBlast will appear somewhat different from most in that it will include more content than usual. We are using this format rather than a Dispatch article due to some rather tight time frames built into the process.
First, no one should be surprised at the fact that assessments, particularly in the lake area, have increased. The real estate market for lake property during the past two years has been “on fire,” so to speak, although there may be some indications that it is cooling a bit.
The graph below shows data for residential real estate sales in Garrett County for the last twenty years through 2022, grouped by those properties in the Deep Creek Lake “influence area” and the rest of the County. The lines indicate the average sale price by year for the two groups, and the bars show the number of sales.
Now to the process going forward:
The View from Thirty Thousand Feet – There are three main portions of the process
The State sets the appraised value of each property – this valuation is appealable within 45 days of the Notice of Assessment, as discussed below.
For each taxing jurisdiction, the SDAT sets what is known as a Constant Yield Tax Rate which is the tax rate that would provide the same revenue as the prior year at the newly assessed values. This will occur by February 15.
Using the assessed values provided by the State, the counties set their tax rate for the next year. If the rate set exceeds the CYTR, the jurisdiction must provide notice and an opportunity for hearings before enacting the rate. This occurred for Garrett County on May 6 of last year.
MORE DETAIL
ADMINISTRATIVE APPEAL OF REASSESSMENT OF REAL PROPERTY
Property owners do have the opportunity to challenge the newly assessed value of their property utilizing 3 levels of administrative appeal. To do so, the property owner must strictly adhere to certain time limits. Following is a summary of the appeal process relating to a reassessment:
- Within 45 days of reassessment by SDAT, the property owner may file an appeal to the Supervision of Assessments. This appeal may be filed online at the SDAT website or may be filed by signing and returning the Notice of Reassessment to the local Assessment Office postmarked by the deadline stated on the Notice of Reassessment. For Garrett County, the local assessment office is:
Philip Smith, Supervisor of Assessments
County Courthouse
317 East Alder St. Rm 106
PO. Box 388
Oakland, Maryland 21550
The reverse side of the Notice of Reassessment lists options for the hearing: (a) written, (b) via telephone or (c) by video hearing. Certain information relating to the reassessment being appealed (sales data and the assessment worksheet for the subject property) will be provided by SDAT to the property owner. The property owner may also request worksheets for comparable properties for a fee.
If a telephone or video hearing is requested, the Supervisor of Assessments Office will schedule a date and time for the hearing and give the property owner notice.
In any event, upon review of a written appeal or following a telephone or video hearing, the Supervisor of Assessments will issue final notice to the property owner of the reassessed value of the real property.
- If the property owner does not agree with the decision of the Supervisor of Assessments, the property owner may appeal to the Property Tax Assessment Appeal Board. The appeal must be filed within 30 days of the date of the final notice of the Supervisor of Assessments.
The Property Tax Appeal Board consists of three members and one alternate – all residents of Garrett County- appointed by the Governor. The property owner will be given notice of the date and time of hearing before the Property Tax Assessment Appeal Board.
The property owner may submit evidence in support of the appeal either in writing or in person and may present different or additional evidence than that used at the Supervisor of Assessments level. Following a hearing, the Property Tax Assessment Appeal Board will give the property owner a written decision on the appeal.
- If the property owner is not satisfied with the decision of the Property Tax Assessment Appeal Board, the property owner may file an appeal with the Maryland Tax Court within 30 days of the Board’s decision. Information and forms relating to how to appeal to the Maryland Tax Court are available by following the last link in the resource list below.
The Clerk of Court will determine the date, time, and location of the hearing on appeal. All hearings at this level are in person. The property owner and SDAT will be required to exchange certain information to be used at the hearing before the Maryland Tax Court at least 10 days before the hearing. Following a hearing, the Court will issue a decision on the appeal. Any further appeals are not administrative and would involve more formal proceedings in the judiciary system.
RESOURCE LIST:
There are various State of Maryland websites and resources which can assist the property owner in determining whether to appeal a reassessment, what information or evidence is useful in supporting an appeal on reassessment and the process at each of the 3 levels of administrative appeal:
- https://dat.maryland.gov/realproperty/Pages/HomeOwners-Guide.aspx
- https://dat.maryland.gov/realproperty/Pages/Assessment-Appeal-Process.aspx
- https://dat.maryland.gov/realproperty/Pages/Area-Sales-Analysis.aspx
- http://www.ptaab.state.md.us/
- https://taxcourt.maryland.gov/
CONSTANT YIELD TAX RATE AND RATE SETTING
The following is a description of the CYTR as contained on the SDAT website:
The property owners’ opportunity to be heard on the issue of property tax rates before they are final.
Although the setting of the local property tax rates is the task of elected officials, Maryland’s Constant Yield Tax Rate Provision gives property owners a voice in the process before the final tax rates are determined. This is done by requiring each taxing jurisdiction to give advance notice and hold public meetings prior to the rate setting if they are considering a tax rate higher than the Constant Yield Tax Rate. Most meetings are held during April, May, and early June. Tax rates must be set by July 1, which is the beginning of the tax year.
The Constant Yield concept is that, as assessments rise, the tax rate should drop to the point that the revenue derived from the property tax stays at a constant level from one year to the next, thus assuring a “constant yield” from this tax source. The Constant Yield Tax Rate is simply a property tax rate that, when applied to new assessments, will result in the taxing authority receiving the same revenue in the coming taxable year that was produced in the prior taxable year.
The Constant Yield Tax Rate is a State Law that exists solely for the benefit of the taxpayer. It represents a clear and direct opportunity for citizen input to influence the level of property taxation.
Prior to February 15, the Department of Assessments and Taxation notifies the counties, Baltimore City, and municipal taxing authorities of the tax rate that would produce the same revenue from the property tax as was produced the year before. The rates certified to the local governments are known as the “Constant Yield Tax Rates” and are based on the new, net assessable base for that jurisdiction. New property or construction added to the rolls for the first time is subtracted from the calculation and allowances for abatements and other deletions are deducted in arriving at the net assessable base for this purpose.
The local taxing authority cannot set a tax rate that exceeds that Constant Yield Tax Rate until first advertising its intent to do so. The notice must meet certain specifications. The taxing authority may, at its option, mail a copy of the notice to each taxpayer instead of publishing an advertisement.
The taxing authority must meet on the day and time shown in the notice. This meeting must be held between 7 and 21 days after the advertisement is published. The hearing must be held on or before June 17th. Afterward, the taxing authority may adopt a resolution or ordinance adopting a property tax rate in excess of the Constant Yield Tax Rate, but if the ordinance or resolution adjusting this tax rate is not approved on the day of the public hearing, the day, time, and place where the resolution or ordinance will be scheduled for consideration and approval must be announced at the public hearing.
The Department of Assessments and Taxation is charged with the responsibility of administering the Constant Yield Tax Rate Provisions. In addition to calculating the rate, the Department also oversees and monitors the advertising requirements. If violations are detected, the Department must report them to the Attorney General who must investigate and take appropriate legal action to effect compliance.
To obtain the Constant Yield Tax Rate for a particular municipality or other local taxing jurisdiction, contact your local assessment office or see the Constant Yield Tax Rate chart on this website.
