By Adam Pagnucco.
When County Executive Marc Elrich announced his FY27 recommended operating budget, he mentioned that it contained a 6.3 cent property tax increase. That doesn’t sound like much, right? That could buy you a sip or two at your local Starbucks. So you might be inclined to pay it without protest. Right?
Here’s the thing. When combined with rising assessments, this 6.3 cent rate increase will likely create a double digit rise in your property tax bill, potentially costing you at least several hundred dollars a year.
To see what this tax hike might cost you, we need to do some basic math.
Step 1: Determine average assessed home value.
According to the State Department of Assessments and Taxation, the average assessed value of an improved Montgomery County single family residence was $702,755 in July 2025. For condos, the average assessed value was $283,285. We will use those averages as a starting point for the tax bills.
Step 2: Determine assessment increase.
The state assesses properties in three geographic groups, with each being reassessed every three years. In Montgomery County, the last three years saw reassessments of +21% in Group 3 in 2024, +17.7% in Group 1 in 2025 and +12.2% in Group 2 in 2026. Those are three-year increases that are phased in over three years. Your exact annual assessment increase for 2026 will depend on where you live. As a proxy, we will use the compound annual average increase of the three groups over that period of time, which works out to 5.365%.
Step 3: Determine the tax rates.
Montgomery County property tax bills collect both state and county property taxes. The rates are expressed as dollars per hundred dollars of assessed value. The state rate – 0.112 dollars per hundred dollars of assessed value – has remained unchanged for many years. The county’s total property tax rate, which aggregates several taxes paid by residents, would change under Elrich’s recommendation from 1.0392 dollars per hundred dollars of assessed value to 1.1031. These are the rates we will use to determine this year’s and next year’s property tax bills.
Step 4: Apply the Income Tax Offset Credit.
The Income Tax Offset Credit (ITOC) is by far the most commonly used tax credit in the county. It applies a flat $692 credit to tax bills of principal residences. This credit remains unchanged in Elrich’s budget and it will apply to both bills.
Now to the math. Let’s start with a single family, owner-occupied property with an assessed value of $702,755 this year (the county’s current average). We assume its assessed value will increase by 5.365%, the compound annual average of the three property groups in the county. We assume that the state’s rate is unchanged and that Elrich’s higher rate will be approved by the county council. The table below shows that calculation.
In this case, the homeowner’s tax bill would rise by $907, a 12.3% increase.
Now let’s do the same exercise with a condo assessed at $283,285 this year (again, the county’s current average). We assume the same assessment percentage increase and rates as in the single-family residence table.
For this condo, the homeowner’s tax bill would rise by $366, a 14.2% increase.
Let’s remember what this analysis excludes: Elrich’s increases to solid waste charges and the water quality protection charge (which are collected by property tax bills), his income tax increase and his recommended special taxing districts, which so far have no rate recommendation. When all of that is added to his property tax increase, the average single-family homeowner could owe more than a thousand dollars in new taxes to the county.
Can you afford it?