Maryland Property Tax Assessment and Income Tax Proposal: What to Know

townhomes in Baltimore, Maryland with trees and colorful architecture

(Image credit: Getty Images)

Property owners in the Old Line State are getting an unfortunate New Year’s present: property value assessments are increasing, some as high as 38%.

Maryland property taxes are not historically among the highest in the country, but they are getting up there. World Population Review reports a national average of $2,459. Maryland residents may feel a financial strain with a median property tax bill of $3,880.

The property reassessment also couldn’t have come at a worse time.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

The Maryland Department of Legislative Services predicts a $2.7 billion deficit for 2026 — which Gov. Wes Moore addressed. “We face a historic budget crisis. The likes of which we haven’t seen in decades," Moore said in a December 2024 keynote speech.

So, amid a battleground of budget deficits, how can you prepare for a potential increase in property tax assessment? And is your county affected? Read on.

Maryland property tax assessment increase

Maryland divides properties into three assessment “groups.” Each year, a different group is assessed, and 2025 is “Group 1’s” turn. 96.9% of residential properties in this segment will see an increase in their property tax bills.

Here’s a breakdown of the groups included in Maryland’s property tax reassessment and how much property valuations have increased since the last assessment:

“Group 3” — an average increase of 23.4% went into effect last year
“Group 1” — an average increase of 20.1% will go into effect this year
“Group 2” — to be determined in January 2026

You can also see the reassessment change across all three groups here, including a breakdown by county for Group 1. Residential areas that will see the highest increases in assessment value this year will be:

Somerset County at 37.7%
Washington County at 34.3%
Wicomico County at 30.6%

The lowest increase is 14.7% in the Charles County area.

While the assessments increase, the state’s Department of Tax Revenue encourages those eligible for the Homestead Tax Credit program to apply. So we’ll cover what you need to know about that and another property tax credit available next.

Maryland homestead tax credit program

Generally, there are several ways to reduce your property tax. However, if you are a Maryland resident, one way is through the state’s Homestead Tax Credit program, which limits the reassessment increase to 10% (county and municipality percentages may be lower).

The amount over the limit is automatically applied to your next homeowner property tax bill. But you must apply for the program first.

To qualify for the homestead tax credit, there are also several eligibility requirements, including:

Your home must be your primary residence
You must have lived there for at least six months
Your property did not transfer to new ownership

The application is one-time only, meaning you do not need to apply annually for the same residence.

See the State’s Department of Revenue website for complete eligibility requirements and application information.

Maryland property tax credit program deadline

Maryland also has a Homeowners’ Property Tax Credit Program which limits the amount of property taxes you must pay based on income. Among other requirements, you may be eligible for this program if you meet the following criteria:

Your net worth is under $200,000, AND
Your gross household income is below $60,000

The application deadline for the Homeowners’ Property Tax Credit program is April 15. Any credit due to you will be deducted from your initial July tax bill.

New property tax rate in Maryland?

A poll released this year by Gonzales Research & Media Services, a pollster for thousands of state elections over forty years, found that Maryland voters were against tax hikes to deal with the state’s growing deficit, including 77% opposed to a property tax increase.

Those polled were 811 registered Maryland voters who said they were likely to vote in the next election. (Gov. Moore has expressed interest in running for re-election for governor in 2026 and some speculate he could consider a potential presidential bid in 2028.)

However, with a growing deficit and proposed bills that could increase spending, a tax rate increase may not be entirely out of the picture just yet.

Maryland tax increase and cuts proposal

Gov. Moore released a budget plan earlier this month that includes the following higher income tax rates:

6.25% for those making $500,000 or more in income
6.5% for those making more than $1,000,000 in income
1% surcharge on capital gain income for those earning more than $350,000

The plan also increases taxes on gambling, betting, and cannabis.

However, in a press release, Moore states that nearly two-thirds of low- and middle-income residents would see a tax cut, and that state budget spending would be cut by $2 billion.

Other proposed Maryland tax code reforms include:

Expanding the state child tax credit
Lowering the corporate tax rate
Doubling the state standard deduction
Eliminating inheritance taxes

While the proposal does not raise property taxes, there is no mention of lowering them either.

The plan is currently pending approval by state lawmakers.

More on Property Taxes

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.