Property Tax Reduction Strategy

What's the plan?

A strategy to reduce the Baltimore City homeowner tax rate below $2, delivering the lowest homeowner tax rate in Baltimore in 50 years.

Homeowners will see an initial 1-penny reduction on July 1, 2026, and an additional 4 pennies next July, which will bring the rate to $1.99. 

In addition, the 10-Year Financial Plan calls for continued 1-cent reductions to the residential homeowner rate every year through FY 2035.

How does it work?

When your property taxes are calculated, we start with the current effective homeowner tax rate, which is $2.04 per $100 of assessed value (so if your home is worth $100,000, you pay $2,040). 

Then the City takes into account any deductions (additional savings) you may qualify for. This includes the Homestead credit, which caps taxes on the growth of your home at 4% (so if your home grows 10% in value, you pay taxes as if it only grew 4%). 

This plan has two parts that result in savings:

1. It lowers the overall homeowner tax rate from $2.04 to $1.99. Initial savings will go into effect July 1, 2026, with the remaining savings implemented July 2027.
2. It adjusts the Homestead credit. Currently, the credit caps taxes on growth at 4%. This plan increases that cap slightly, to 5%. 

The decrease to the overall tax rate will offset any increases from the Homestead adjustment for the vast majority of homeowners.

Frequently Asked Questions

How can the City afford this? 

This is a tax cut paid for by the City’s budget, and has been taken into account as we develop future budgets as part of the 10-Year Financial Plan. 

In addition to these initial reductions, the 10-Year Financial Plan calls for continued 1-cent annual reductions to the residential homeowner rate through Fiscal Year 2035. 

Will anyone pay more as a result of this plan?

Homeowners will be fully protected from any increases to their property taxes through two full assessment cycles (6 years).

After that point, a hypothetical homeowner who experiences 3 straight cycles of rapid triennial growth—which means their home is growing at an astronomical rate for 12 straight years—could pay slightly more under this plan. That scenario, while possible, is highly unlikely.

The vast majority of homeowners will see savings in the short term and in the long run, even if their home experiences average growth or several years of significant growth. 

Is raising the Homestead cap a tax increase?

No. The decrease to the overall tax rate will offset any increases from the Homestead adjustment for the vast majority of homeowners.

Do I qualify for the Homestead credit? How do I access it?

Our data tells us nearly 100,000 Baltimoreans could qualify for the Homestead—but only about 75% are enrolled.

You qualify for this credit if your home is your primary residence and has been for at least 6 months. You have to apply for the Homestead credit, but you only have to apply once. There is no application deadline, and all owner-occupied properties are eligible, regardless of income.

To apply online, visit Maryland OneStop Portal and select Department of Assessments and Taxation.

NOTE: Some residents have experienced issues at the State level when trying to verify their eligibility. Please email DHCD.TaxSaleInfo@baltimorecity.gov or call 410-396-3023 if you need help.

Why can’t the City just cut the tax rate on its own?

Cutting the tax rate on its own would not be fiscally responsible or sustainable for the City, and could result in taxes increasing again in the future.

This approach, in line with the 10-Year Financial Plan, includes an initiative to continue a 1-cent per year reduction to the residential homeowner rate through FY 2035.