With new assessments arriving later this year, commercial property owners should begin evaluating their property values now.
Maryland’s next round of real property tax assessments is approaching. In late December, approximately one-third of the state’s property owners will receive new assessment notices from the Maryland State Department of Assessments and Taxation (SDAT), establishing updated property values for the 2027 assessment cycle.
For commercial property owners, these notices deserve careful attention. An assessment that overstates a property’s fair market value can result in an unnecessarily high property tax burden. And with only 45 days from the date of the assessment notice to file an appeal, the opportunity to challenge that valuation is limited.
Now is the time to determine whether your property’s assessed value accurately reflects its market value.
What Could Affect Your Commercial Property’s Assessment?
Commercial real estate values are influenced by far more than a property’s location, size, or recent sales of comparable properties. Financial performance, market conditions, and limitations on a property’s use can all affect its fair market value.
Property owners should consider whether SDAT’s valuation adequately accounts for factors such as:
- Vacancy and leasing challenges: Increased vacancies, declining rental income, tenant turnover, or difficulty securing new tenants.
- Operating costs and property performance: Rising insurance, maintenance, utility, and other expenses that affect a property’s net operating income.
- Market conditions: Changes in demand, capitalization rates, financing conditions, or comparable property values.
- Physical condition: Deferred maintenance, necessary capital improvements, structural issues, or other conditions affecting value.
- Development and land use restrictions: Zoning limitations, environmental regulations, easements, or other constraints that reduce a property’s development potential or permissible uses.
These considerations can be particularly important for office buildings, shopping centers, industrial properties, multifamily developments, hotels, undeveloped land, and other commercial real estate.
A property’s assessed value should reflect what the property is actually worth in the market, not simply what it might be worth under ideal conditions.
Understanding Your Opportunity to Appeal
Maryland reassesses properties on a three-year cycle, with approximately one-third of properties reassessed annually. Owners receiving new assessment notices generally have 45 days from the date of the notice to challenge the valuation.
Property owners who are not receiving a new assessment may also have an opportunity to challenge an existing valuation through a Petition for Review. Those petitions generally must be filed by the first working day following January 1.
Because these deadlines can arrive quickly, owners should begin reviewing their property’s financial and operating information before the new assessment notices are issued.
Don’t Wait for Your Assessment Notice
An assessment appeal can require careful analysis of a property’s income, expenses, market conditions, physical characteristics, and development limitations. Beginning that process now allows time to identify potential valuation issues and evaluate whether an appeal is warranted.
Rosenberg Martin Greenberg’s Property Rights and Land Valuation attorneys represent commercial property owners in assessment appeals and valuation disputes throughout Maryland. Having represented both taxpayers and taxing authorities, our attorneys bring valuable insight into how properties are assessed, how valuations are challenged, and what evidence may support a reduction.
If you own commercial property in Maryland, now is the time to review your assessment exposure. Contact Harris Eisenstein or TJ Creevy to discuss your property, the upcoming reassessment cycle, and whether there may be an opportunity to reduce your property tax burden.