Understanding Property Taxes in the DMV

Property taxes are one of those line items that feel confusing until you see how the pieces fit together. If you own a home or are planning to buy in DC, Maryland, or Northern Virginia, here is a simple overview of how property taxes work, what drives your bill, and a few ways to make sure you are not leaving money on the table.

What property taxes pay for

Local property taxes fund services you use every day. Think schools, public safety, parks, and infrastructure. Because these are local budgets, the rules and rates vary by city and county. Two homes a few miles apart can have different tax rates and different credits.

The three factors that drive your bill

1. Assessed value
   Your local assessor estimates your home’s market value for tax purposes. Assessments are updated on a schedule set by each jurisdiction. If your neighborhood has appreciated, your assessed value can rise even if you have not made major updates.
2. Tax rate
   Set by the city or county. It is applied to your assessed value to calculate the base tax. Rates differ by jurisdiction and can change year to year during local budget season.
3. Exemptions and credits
   These reduce what you owe. Common examples in the DMV include owner-occupant homestead benefits, caps on annual assessment increases, and targeted relief programs based on age, disability, or income. The programs and eligibility rules are different in DC, MD, and VA, and sometimes even by county.

How payments work

• At closing: Buyers typically pay a prorated share for the portion of the tax year they will own the home.
• While you own the home: Most lenders collect taxes with your monthly mortgage payment and pay the bill through an escrow account. If you pay your mortgage off or choose not to escrow, you will receive tax bills directly from the jurisdiction on their schedule.

Homestead and primary residence benefits

If the home is your primary residence, check for an owner-occupant benefit and file on time. In our area, these programs can:

• Reduce your taxable assessed value
• Cap how much the taxable assessment can rise each year
• Provide additional credits for eligible seniors or homeowners with disabilities

These are not automatic in many jurisdictions. You usually need to claim the benefit and keep your mailing address and ownership details current.

When assessments jump

Seeing a higher assessed value does not always mean your bill will spike by the same amount. Caps, credits, and phased-in increases can soften the change. If you believe the assessed value is above market, most jurisdictions offer an appeal process with deadlines. A strong appeal uses recent comparable sales and clear evidence, not just opinion.

Common questions I get

• Will my taxes go up when I buy?
  They can. A sale can trigger a reassessment cycle or remove a credit the seller had. Plan for that possibility.
• Are condo taxes lower than single family taxes?
  Taxes are based on assessed value and local rate, not the property type. Condos often have lower assessed values than a similarly located single family home, but you should look at the actual tax record rather than assume.
• Can I deduct property taxes on my income taxes?
  Possibly, subject to federal and state rules and caps. This is a good question for your CPA.

Bottom line

Property taxes are local, rule-driven, and very manageable when you know what to look for. The right move is to confirm the current bill, understand how assessments and credits apply to your specific home, and set reminders for any deadlines.