Overview of Montgomery County, MD Taxes
Montgomery County, Maryland is one of the wealthiest counties in the country. It has an average effective property tax rate of 0.99%, and a median annual property tax payment of $4,859.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
Montgomery County Property Tax Rates
The median home value in Montgomery County is $491,700. The median real estate taxes paid per household in Montgomery County is $4,859, which makes the average effective property tax rate here 0.99%. This matches the national average effective property tax rate, which currently stands at 0.99%.
The property tax levy year in Montgomery County stretches from July 1 to June 30. Each year, the County Council sets a tax rate that will be applied to the assessed value of Montgomery County property that is not exempt from property taxes.
For the sake of streamlining the tax collection process, Montgomery County government collects taxes from 23 municipalities in the county. Among these 23 municipalities are larger cities like Rockville and Gaithersburg.
A financial advisor can help you understand how homeownership fits into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Montgomery County Property Tax Breaks
Need some help with your property taxes? Maryland has a Homeowner’s Property Tax Credit Program, and Montgomery county has a County Supplemental tax credit program. The credit is administered by the State of Maryland. Eligibility is based on household income and applications are due no later than September 1 of each tax year.
There’s also special property tax assistance for Montgomery County senior citizens. To qualify, property owners must be at least 65 years old. The credit can equal up to 50% of the combined State Homeowner’s Property Tax Credit (HOTC) and the County Supplement. To qualify, seniors must apply for the HOTC through the State of Maryland. When you apply for the HOTC, the Maryland State Department of Assessments and Taxation will determine whether you’re eligible for not just the HOTC but the County Supplement and the Senior Property Tax Credit, too.
Another property tax break available to Montgomery County property-owners is the Homestead Tax Credit. If your Montgomery County property tax bill exceeds 10% of your gross income (before any deductions are taken), the county will give you a credit. The credit is only available if the property in question is your principal residence, your net worth (not including the value of your home) is less than $200,000, and your combined gross household income is less than or equal to $60,000.
If you file and qualify by May 1, the credit will appear directly on your tax bill, or as a credit certificate that will be sent to you when your property tax bill is mailed. If you file between May 1 and the September 1 deadline, the credit will appear either as a revised tax bill or a tax credit certificate. If your credit arrives after you’ve paid your bill, you’ll get a refund for the tax credit amount. If your application for the Homestead Tax Credit is rejected, the County will notify you by letter and the letter will also explain the appeals process.
If you have questions about how property taxes can affect your overall financial plans, a financial advisor in Bethesda can help you out.
How Your Montgomery County Property Tax Bill Works
Owner-occupied residential property owners will automatically be placed on a semi-annual property tax payment schedule. You can opt to pay annually but you must notify your lender before May 1 (if you have a mortgage). Annual and semi-annual tax bills are mailed to Montgomery County homeowners in July of each year. Tax bills are also posted to the Montgomery County website by July 1. Annual tax bills are due on September 30. If you pay in semi-annual installments, the first one will be due September 30 and the second installment will be due December 31. If you receive a supplemental or revised tax bill, it will be due 30 days from the date it was issued (not 30 days from the date you received it). There is no discount for early payments and you can’t prepay taxes for the following year.
Your tax bill will indicate whether you have any unpaid property tax bills from prior years, or whether there is a property tax lien on your property. If you don’t get your tax bill in your mailbox, check online. Not getting a physical copy of your bill doesn’t excuse late payment, so stay on top of your tax bills and be sure to inform the county if your address changes.
There are several options for paying your property tax bill. If you pay online, you will not incur any transaction fees if you pay by electronic check. But if you pay by debit card or credit card, the County will impose a 2.3% convenience fee. It’s also possible to pay by telephone but the same 2.3% fee applies for debit and credit card payments.
You can pay by mail and send a check, but the County advises that you send your payment five to seven days before the due date to avoid late fees.
Places Receiving the Most Value for Their Property Taxes
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Methodology
Our study aims to find the places in the United States where people are getting the most value for their property tax dollars. To do this, we looked at property taxes paid, school rankings and the change in property values over a five-year period.
First, we used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
As a way to measure the quality of schools, we analyzed the math and reading/language arts proficiencies for every school district in the country. We created an average score for each district by looking at the scores for every school in that district, weighting it to account for the number of students in each school. Within each state, we assigned every county a score between 1 and 10 (with 10 being the best) based on the average scores of the districts in each county.
Then, we calculated the change in property tax value in each county over a five-year period. Places where property values rose by the greatest amount indicated where consumers were motivated to buy homes, and a positive return on investment for homeowners in the community.
Finally, we calculated a property tax index, based on the criteria above. Counties with the highest scores were those where property tax dollars are going the furthest.
Sources: US Census Bureau 2018 American Community Survey, Department of Education
