Ahead of the Curve: Business Owners: Deadlines Loom for Your Real Property Tax Assessments
The Selzer Gurvitch 2020 Guide for Maryland and Washington, D.C. Commercial Property Owners
By Jessica D. Lieberman, Esq.
Counsel at Selzer Gurvitch Rabin Wertheimer & Polott, P.C.
December 14, 2020
It’s that time of year when the values of commercial properties will be reassessed. Selzer Gurvitch can help you file appeals on these new assessments. But you need to hurry, because deadlines are looming for real property tax assessments in both Maryland and in Washington, D.C. Read on to learn more and find out when, and if, you should file.
First things first: What Is a Real Property Tax Assessment? How Are Properties Assessed?
An assessment is an estimate of the current or fair market value of a property as determined by a taxing authority. A tax rate is applied to the assessment to determine the annual property tax.
Commercial properties are assessed using one or more of the three accepted approaches to market value: 1) sales approach, 2) cost approach, and 3) income approach. If a property is income-producing, the methodology for assessment is typically the income approach. For newly constructed properties and residential properties, the sales or cost approach could be used.
For more about how COVID-19 may affect Maryland businesses, learn how Selzer Gurvitch can help file your mid-cycle appeal and get you financial relief.
- Notices of Assessment will be mailed at the end of December 2020.
- Appeals are due 45 days from the date of the Notice, around early to mid-February 2021.
- Petitions for Review must be filed by January 4, 2021.
- Notices of Proposed Real Property Assessments will be mailed at the end of February 2021.
- Appeals are due by April 1, 2021.
Reassessing Maryland Property
In Maryland, properties are reassessed every three years, with one-third of all properties in Maryland being reassessed every year. When property values increase, the increase is phased-in with equal increments over the following three years. The resulting taxes are phased in over the course of the three years so that the full and final taxes are paid in the third year of the triennial.
There are three levels of appeals in Maryland. The property owner has the burden of proof at each level to show that the assessed value is too high.
- Supervisor’s Level – Informal meeting with an assessor from the State Department of Assessments and Taxation (“SDAT”).
- Property Tax Assessment Appeal Board (“PTAAB”) – Comprised of a three-person independent appeal board, made up of residents with experience in real estate. An assessor from SDAT is present at the hearing and will present its arguments as to why the assessment is correct.
- Tax Court – More formal proceedings, but less formal than a typical court case. Little discovery is permitted, except for taking the deposition of the assessor from SDAT.
At the end of December, Notices of Assessment are sent to each property owner whose properties are being reassessed for that triennial. If the property owner believes that the estimate of value of the property is incorrect, the property owner may file an appeal to dispute the value. Appeals are due within 45 days after the date of the Notice of Assessment. Appeals of assessed values can also be filed during a triennial as a Petition for Review or within 60 days of the transfer of property between January 1 and June 30.
Reassessing Washington, D.C. Property
In the District of Columbia, properties are reassessed annually. Notices of Proposed Real Property Assessments are sent out at the end of February of each year and appeals of those assessed values are due by April 1. A new owner has 45 days to appeal after the date of the property transfer, or May 15, whichever is later, as long as the transfer occurred by September 30, before the beginning of the tax year.
In the District of Columbia, there are also three levels of appeal, similar to those in Maryland. The first level is an informal meeting with an appraiser from the Office of Tax and Revenue. The second level is an appeal to the Real Property Tax Appeals Commission (“RPTAC”) and as a final resort, an appeal can be filed with the D.C. Superior Court.
Let Selzer Gurvitch help.
We can assist you with filing your assessment appeals and Petitions for Review in Maryland and Washington, D.C. We invite you to contact one of our real estate taxation attorneys below to discuss your needs.
Disclaimer: The information contained in this material is not intended to be considered legal advice and should not be acted upon as such. Because of the generality of this material, the information provided may not be applicable in all situations and should not be acted upon without legal advice based on the specific factual circumstances.