I wrote “The proposed Fiscal Year 2021 Operating Budget for Howard County includes $21 million in anticipated new funding from an expected recordation tax rate increase” on April 21st. Since then other local bloggers have provided information on this topic:
- Dr. Chao Wu: 2020 Proposed HoCo Recording Tax Increase
- The Merriweather Post: Operating Budgets and Tax Increases
Included in the proposed Howard County Government Operating Budget:
The budget also includes $21 million in anticipated new funding from an expected recordation tax rate increase from $2.50 per $500 transaction, currently the lowest among all counties in Maryland (with rates ranging between $2.5~$6.6), pending County Council legislation. While no tax increase is desirable, this move will keep our County on par with peer jurisdictions and is necessary relief in a time of severe fiscal difficulty without impacting most residents or businesses (except those involved in property sales or refinancing). It also helps avoid other tax actions that may impact more tax payers in a more significant way.
The thing that I wanted to look at this morning was the statement “this move will keep our County on par with peer jurisdictions”.
First lets look at the proposed rate change via the information shared about the legislation (I think it should be filed later today):
Next lets look at the rates in surrounding areas: (source)
Montgomery County: 8.90/1000 (on 1st $500K) | 13.50/1000 above $500K
Prince George’s County: 5.50/1000
Anne Arundel: 7/1000
Baltimore County: 5/1000
Baltimore City: 10/1000
Carroll County: 10/1000
Current Howard County: 5/1000
Proposed Howard County: 4/1000 (on 1st $250,000) | 10/1000 (on the next $250,001 – $500,000) | 16/1000 ( on the next $500,001 to $1,000,000) | 22/1000 ($1,000,001 and above)
Looking at the proposed Howard County rates the changes do not “put us on par” but looks to put us way “over par” as it relates to surrounding areas.
- Important item of note – Carroll County does not have a county transfer tax so they are actually the least expensive in total taxes to purchase and sell a home. They are on the expensive side to refinance a home of the jurisdictions noted above.
Here is a link from Dr Wu that has some numbers you might find interesting: https://chaowu.org/wp-content/uploads/2020/04/HoCo_recording_tax_change.csv
I have more research to do on this topic and look forward to reading the full legislation after it is filed.
From this article I wrote back in February:
How heavy a tax burden is already on residents of Howard County?
- Howard County has the 2nd highest property tax rate (including fire tax) and the highest personal income tax rate allowed by the State. The recordation tax is at the lowest rate in the State and the transfer tax is below four other counties.
- The County recently increased the fire tax and trash fee, imposed a new ambulance fee (the revenues are restricted for specific uses), and increased the School Surcharge (restricted for school capital projects).
- The County recently approved a Plastic Bag fee that will begin in October 2020 (restricted for “environmental” purposes).
The question that will be asked by many (I expect)…given the past tax increases by the current County Council and the financial hurt that will be felt by many due to the Coronavirus pandemic…is this the time for another tax increase for our county?
Let me know your thoughts in the comments.
Link used to calculate information in the chart above: http://www.anytimeestimate.com/TITLE_INSURANCE/md-title-insurance.htm