Property Taxes - Authority of Counties to Establish Subclasses and Set Separate Rates for Land and Improvements to Land
HB 78 would expand local property tax authority in Maryland by allowing Baltimore City and county governments to create new real property subclasses for land and for improvements to land, and to set separate tax rates for each subclass. Under current law, counties generally must apply a single county property tax rate to all real property, subject to limited exceptions. This bill adds land and improvements to land as explicit subclasses and authorizes different rates for each, so long as the rates are applied uniformly within the jurisdiction to all property in the same subclass.
The bill also amends existing property tax classification language to include land and improvements to land alongside the existing subclass for vacant lots or property cited as vacant and unfit for habitation. The effective date is June 1, 2026, and the new authority would apply to taxable years beginning after June 30, 2027, giving local governments time to consider whether to adopt separate rates and adjust their tax structures.
If enacted, HB 78 would change Maryland Tax-Property law by creating explicit authority for Baltimore City and counties to classify real property into land and improvements-to-land subclasses and to impose different county property tax rates on each. It would modify § 6-202.1 and § 6-302 of the Tax-Property Article, loosening the current single-rate rule for county real property taxes. The practical effect would be to give local governments a new tool for shifting tax burdens between land value and building value, potentially affecting homeowners, landlords, developers, and owners of vacant or underused parcels.
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the overall sentiment appears procedural and exploratory rather than clearly supportive or opposed. The bill is framed as a local-government authority measure, suggesting it is intended to give counties and Baltimore City flexibility rather than mandate a statewide tax change. No recorded floor votes or committee comments are available here to indicate broader political support or opposition.
The main point of contention is likely the policy choice to tax land and improvements separately, which can shift tax liability between property owners depending on local rate-setting decisions. Supporters would likely view the bill as a way to modernize property taxation and encourage more efficient land use, while opponents may worry about higher taxes on certain property owners, uneven local impacts, or administrative complexity. Because the bill leaves adoption of separate rates to local governments, debate would likely center on whether this flexibility is beneficial or whether it could create uncertainty and tax disparities across jurisdictions.