By: Mike Kennedy|
June 28th, 2008
Category: Deep Creek Lake Real Estate
The dramatic growth in real estate values and assessments in Garrett County Maryland over the past ten years, particularly the Deep Creek Lake area, has reaped huge economic benefits for local citizens and county government.
Real property in Maryland is subject to tax with the rates and assessments varying widely between jurisdictions. As most property owners know, the amount of property tax that you eventually pay is based on two criteria, the assessment (determined by the state and presumably based on a property’s value) and the rate of tax (two rates - set by the local jurisdiction and the state legislature). The state regularly reassesses property values on a three-year cycle. Tax rates can change yearly.
In Garrett County, the Board of County Commissioners sets the county real property tax rate. For FY 2009 (starting July 1), it will remain at $1.00 per $100 of assessed value. The county estimates that more than 65% of its anticipated local revenue, or almost $39 million, will come from real estate related taxes during this coming fiscal year. Real estate related taxes also include local transfer and recordation taxes. The state’s property tax rate is much smaller and remains unchanged at $.112 per $100 of assessed value.
Compared to two fiscal years ago, county revenue has increased by more than $8.5 million, mostly due to the increase in property related taxes. The next highest source of county revenue is income taxes, which represents only about a third of the revenue obtained from real estate. Property related taxes drive the county budget and the services it provides.
In FY07, real estate related taxes represented about 58% of the county’s revenue sources. A decade or so ago, the percentage was within the 50% range. This increase over time demonstrates the strong value of the assessable property base on the local level and the county’s increasing reliance on it to fund the county budget.
How does Garrett County compare to the rest of the state? In FY 2008, sixteen counties (including Baltimore City) had lower real property tax rates, with Garrett ranking 7th in the state. Its recordation tax rate during the same period ($3.50 per $1000) was about in the middle of the range of counties, tied with Wicomico County on the Eastern Shore.
Over the next two years, the MD Department of Assessment and Taxation estimates that the assessable real property tax base in Garrett County will increase by more than $245 million. Since FY 2001, the assessable base has increased by more than $2.3 billion to a level over three-times that of the late 1990s. This rate of increase has allowed property tax revenues to surpass all other forms of county revenue.