Baltimore City Property Taxes Are Going Down: What Homeowners Need to Know in 2026

If you own a home in Baltimore City (or you're thinking about buying one!), there's real news to pay attention to: the City's property tax rate is finally coming down. After years of carrying the highest property tax rate in Maryland, Baltimore City just approved a multi-year plan to bring that rate below $2.00 per $100 of assessed value.

As a Baltimore City Realtor, I get questions about property taxes every single week. So here's a clear, no-jargon breakdown of what's actually changing, how much money it puts back in your pocket, and what it means whether you're staying put, selling, or buying.

The Quick Answer

• Baltimore City's current property tax rate is $2.248 per $100 of assessed value — the highest of any jurisdiction in Maryland.

• Starting July 1, 2026, the rate drops by 1 cent, with City leaders' long-term plan calling for it to fall further in future years.

• The City's stated goal is to bring the effective owner-occupied rate to $1.99 (and eventually lower) over the next several years.

• The plan also raises the Homestead Tax Credit cap from 4% to 5%, which limits how much your taxable assessment can grow each year.

• For most owner-occupied homes, the rate cut is expected to offset the Homestead adjustment, meaning real savings rather than a wash.

Why This Is Happening

For years, Baltimore City's property tax rate has run roughly double that of surrounding counties like Baltimore County, Howard County, and Anne Arundel County. City leadership, including Mayor Brandon Scott, has pointed to that gap as a major obstacle to attracting and keeping homeowners in the city. In February 2026, the Mayor announced a three-part property tax relief strategy aimed at making the city more competitive, followed by City Council action in June 2026 that formally advanced a one-cent rate cut as part of the budget process.

This isn't a one-time gesture. It's the opening move in a longer-term plan that calls for continued annual reductions to the residential homeowner rate through Fiscal Year 2035, with the goal of eventually reaching a rate around $1.81.

What's Actually Changing: Two Moving Parts

It's worth understanding that this isn't just a rate cut. There are two pieces working together, and they matter together, not separately.

1. The Tax Rate Itself Is Dropping

The current rate of $2.248 per $100 of assessed value is being reduced. The first cut (1 cent) takes effect July 1, 2026. City leadership's original proposal called for a steeper cut down to $1.99 immediately, but the version that passed Council in June 2026 was a scaled-back, more gradual approach, with additional reductions planned in future budget years.

2. The Homestead Tax Credit Cap Is Increasing

The Homestead Tax Credit limits how much your taxable assessment can increase each year, even if your home's actual market value jumps higher. That cap has been 4% since the 1990s — among the lowest in Maryland. Under the new plan, it rises to 5%.

In plain terms: your home's taxable value is now allowed to grow a little faster each year than before. On its own, that would mean a slightly bigger tax bill for some homeowners. That's exactly why it's paired with the rate cut — the lower rate is designed to offset the higher cap for the vast majority of homeowners.

City officials estimate that only a small number of households (those experiencing unusually rapid, sustained value growth over many consecutive years) could see a modest net increase. Officials cited roughly 500 out of 75,000 eligible households as having experienced that kind of extended rapid growth over the past decade.

What Does This Actually Save Homeowners?

Numbers help here more than percentages. Based on figures released by the City and reported by local outlets:

Home Value	Estimated Annual Savings (Year 1, 1-cent cut)
$200,000	~$20
$500,000	~$50

That first-year number is modest — and city leaders have been upfront that this initial cut is intentionally small compared to the original proposal. The bigger story is the multi-year trajectory. As an example used by the City: a $200,000 home that sees its assessed value grow by about 10% at reassessment could see roughly $106 in cumulative savings by year two compared to the old rate structure. A home with slower, more typical growth (around 8% over three years) might see closer to $70.

For context, Baltimore City homes have historically appreciated about 12% between triennial reassessments — roughly 4% per year — so most homeowners fall closer to the "typical growth" scenario.

The Homestead Credit: Make Sure You're Actually Enrolled

This is the part I want every client and every Baltimore homeowner to hear clearly: none of these savings help you if you're not enrolled in the Homestead Tax Credit.

The City estimates that nearly 100,000 Baltimore homeowners qualify for this credit, but only about 75% are actually enrolled. That means tens of thousands of eligible homeowners may be leaving money on the table.

You qualify if:

• The property is your primary residence

• You've lived there for at least 6 months

• There's no income requirement

You only have to apply once — there's no annual renewal and no application deadline. You can apply through the Maryland OneStop Portal under the Department of Assessments and Taxation. If you run into verification issues, the City's tax sale info line (410-396-3023) can help.

If you're a client of mine and you're not sure whether you're enrolled, I'm happy to help you check your tax bill — it'll show a "state assessment credit" and "city assessment credit" line if you're already receiving it.

What This Means If You're Selling

A lower, more competitive property tax rate is a genuine selling point, especially for buyers comparing Baltimore City to the surrounding counties. Affordability conversations with buyers often stall once they see the tax line on a mortgage estimate — a declining rate trend gives you a real, factual talking point rather than a vague promise that "it's getting better." It also supports the City's broader narrative of renewed investment and demand, which can be a useful addition to listing conversations and buyer presentations.

What This Means If You're Buying

Run your numbers using the current rate ($2.248) for your worst-case scenario, but know that the trend is downward over the next several years. Don't assume the eventual $1.99 or lower rate when budgeting for a purchase today — the reductions are phased in gradually, not immediate. And always confirm Homestead eligibility on any home you're considering; if a property hasn't had a recent owner-occupant, the Homestead credit may not currently be applied, which can make a current tax bill look artificially low or high relative to what you'd actually pay.

A Few Honest Caveats

Not everyone agrees this is a clean win. Some City Council members raised concerns during the June 2026 vote that pairing the rate cut with a higher Homestead cap could mean some homeowners — particularly those with several consecutive years of fast-rising assessments — end up paying more, not less. City officials maintain that this affects a small minority of households and that the "vast majority" of homeowners come out ahead, but it's a fair point to understand rather than gloss over, especially when advising clients with rapidly appreciating properties.

It's also worth noting that the broader, more aggressive version of this plan (cutting the rate all the way to $1.99 immediately) was not what ultimately passed — the approved version is more gradual. If you've seen bigger numbers circulating in the news or on social media, that's likely referencing the original proposal rather than what was actually enacted.

The Bottom Line

Baltimore City's property tax rate is heading down for the first time in decades, starting with a modest one-cent cut on July 1, 2026, and continuing through a multi-year plan that aims to eventually bring the rate to around $1.81. The savings start small but compound over time, and pairing the rate cut with Homestead Credit enrollment is the real key to maximizing what you save.

If you own property in Baltimore City and want help understanding what this means for your specific tax bill, your home's value, or your timeline to sell, I'm always happy to walk through it with you.

Sources & Further Reading:

• Baltimore City — Property Tax Reduction Strategy

• Baltimore City — Real Property Taxes

• Live Baltimore — Taxes & Credits

• The Baltimore Banner — "How much will you save after Baltimore's small property tax cut?" (June 2026)

• Mayor Brandon M. Scott — Property Tax Affordability Initiatives Announcement

This post is for general informational purposes and reflects publicly available information as of June 2026. For guidance specific to your property and tax bill, consult the Baltimore City Department of Finance or your tax advisor.

Published by Molly Reed, Baltimore Realtor with Compass.