Bought a Flipped Home in Montgomery County? Why Your Property Tax Jumped (and What You Can Do)

Part of: The Complete Guide to Buying a Home in Montgomery County, MD

Short version: If you buy a renovated ("flipped") home in Maryland, the property tax shown in the listing usually reflects the house before the renovation. Once the State picks up the renovation, your tax can rise sharply, often within months of closing. Budget for taxes based on what you paid, not on the listing's tax figure. The estimator above does that math for you.

This article is general information based on Maryland and Montgomery County public sources, last reviewed in October 2026. I'm a REALTOR®, not an attorney or tax advisor. Tax rules, rates and deadlines can change, so confirm anything important with the Maryland Department of Assessments and Taxation (SDAT) or a tax professional.

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The case study

A homeowner reached out to me through this website with a question many buyers of renovated homes eventually ask: "Why did my property tax go up 50% after I bought?" Details are kept confidential, and figures below are rounded.

The house: A 1960s colonial in the Potomac area of Montgomery County. An investor bought it in rough condition, did a full renovation (new kitchen and baths, new roof and windows, a fully finished walkout basement with additional bedrooms), and resold it in late 2025 for a little under $1.9 million.

What the buyers expected: The listing showed annual property taxes of about $14,000. Their lender set up the escrow account around that number.

What actually happened:

When	What arrived	Approx. amount
Late 2025	Closed on the home. Listing showed taxes of ~$14,000/yr	—
Early 2026	A supplemental, partial-year tax bill	~$4,000
Summer 2026	First full annual tax bill as the new owners	~$21,500/yr

That's roughly a 50% increase within a year of buying, and a first-time U.S. homebuyer understandably wanted to know whether it was a mistake and whether it could be appealed.

The short answer: It wasn't a mistake. The new assessment ended up slightly below the price they paid. The taxes they saw in the listing reflected a house that no longer existed.

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Why it happened: five things most buyers don't know

1. Maryland reassesses on a three-year cycle

Every property in Maryland is reassessed by SDAT once every three years, with about one-third of properties reassessed each year. When the value goes up at a regular reassessment, the increase is generally phased in over the three years of the cycle. So between reassessments, your assessment can lag well behind what the house would actually sell for. (More on the cycle in how Montgomery County property assessments work.)

2. Big renovations trigger a mid-cycle reassessment

Maryland lists a handful of situations where SDAT revalues a property outside the normal cycle. One of them is new construction or improvements that add more than $100,000 in value (Maryland Assessment Procedure Manual, Reassessment Out-of-Cycle). In Montgomery County, assessors track properties under construction or renovation through building permits, and they pick up the added value once the work is substantially complete (Montgomery County OLO Report 2018-1).

In our case study, the public records tell the story clearly:

• The land value didn't change.
• The building value nearly doubled, from about $700,000 to about $1.32 million.
• The total assessment went from about $1.2 million to about $1.83 million, a little below the ~$1.88 million purchase price.

The flip was simply added to the assessment, and unlike a regular reassessment increase, this value showed up all at once rather than phased in. (If you're on the investor side of this, see how to flip a house in Montgomery County.)

3. You can get a partial-year bill

Maryland's tax year runs July 1 to June 30. When improvements are picked up mid-year, the owner can receive a supplemental bill covering the rest of that tax year. In our case, the ~$4,000 bill in early 2026 lined up almost exactly with half a year of tax on the added value. (My own back-of-the-envelope math: about $624,000 of added assessment × roughly $1.15 per $100 ≈ $7,200/year, or about $3,600 for half a year.) For the regular bill schedule, see when Montgomery County real estate taxes are due.

Many lenders don't escrow for these supplemental bills in advance. Our buyers' lender advised them to pay it directly.

4. New owners lose the Homestead cap for their first full year

Maryland's Homestead Tax Credit limits how much your taxable assessment can rise each year on your principal residence. In Montgomery County the cap is 10% per year (Montgomery County Finance; the Town of Kensington uses 5%).

The catch: the credit isn't granted for a tax year if the home changed hands during the previous tax year (SDAT Homestead Tax Credit). Montgomery County states it plainly: a new owner is not eligible for the homestead credit in the first full fiscal year of ownership (Montgomery County Office of Consumer Protection).

So in that first full year, nothing softened the jump.

5. The County's required tax estimate doesn't use your purchase price

Montgomery County requires sellers to give buyers an estimate of the property tax for the first full fiscal year of ownership (County Code §40-12C). That's a good rule. But the estimate is calculated from SDAT's current or next-year phase-in assessment, at current rates, with no credits (Montgomery County OCP).

It is not based on the price you're paying. On a typical resale, that's usually fine. On a flipped home, the assessment often still reflects the pre-renovation house, so the official estimate can be far too low through no fault of anyone following the rule.

The key lesson: On a renovated or flipped home, estimate your taxes from your purchase price, not from the listing or the County's estimate.

In our case study: ~$1.88M × $1.1521 per $100 (the FY 2027 combined State and County rate outside a municipality) ≈ $21,700/year, almost exactly the bill they received.

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What are your options once the bill arrives?

Maryland gives property owners three chances to challenge an assessment (SDAT Assessment Appeal Process). For the step-by-step on filing, see the Maryland property tax assessment appeal guide.

Option 1: Appeal an Assessment Notice (45 days)

When SDAT sends a Notice of Assessment (at your regular three-year reassessment, or when it revalues for improvements), you have 45 days from the notice date to appeal. Note that a tax bill is not an assessment notice. If the notice went to the previous owner, or you missed it, this window may already be closed.

Option 2: New-owner appeal (60 days, only for January–June transfers)

If the property transfers to you between January 1 and June 30, you can appeal within 60 days of the transfer. In our case study, the deed recorded in late December, so the buyers missed this option by just a few days.

Option 3: Petition for Review (by the first business day after January 1)

For the two years of the cycle when your property isn't being reassessed, you can file a Petition for Review by the first working day after January 1. It applies to the tax year starting the following July 1 (SDAT Petition for Review form). It won't change a bill you've already received, and it can be decided in writing without a hearing. I recommend filing in December rather than waiting until the last day.

If you do appeal: the three levels

1. Supervisor's level (SDAT): an informal review, often about 15 minutes, in writing, by phone, video or in person. SDAT gives you a property worksheet and a list of area sales beforehand.
2. Property Tax Assessment Appeal Board (PTAAB): an independent local board. You have 30 days from the Supervisor's final notice to appeal (PTAAB FAQs).
3. Maryland Tax Court: within 30 days of the PTAAB decision. You must appear in person.

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Should you appeal? The honest pros and cons

Pros

• It's free to file, and you can do it in writing.
• If you have real evidence the home is worth less than the assessment (lower recent sales of similar homes nearby, or significant problems with the house), the value can come down.
• SDAT gives you its worksheet and comparable sales, so you can see how it valued your home and catch genuine errors.

Cons

• Appeals are decided on market value, not on how much your tax went up. SDAT specifically says that comparisons to past values, the percentage increase, and the amount of your tax bill aren't relevant. If you paid more than the assessed value less than a year ago, it's very hard to argue the house is worth less.
• An appeal can backfire. The assessor reviews your property's details, and the outcome can go either way. SDAT's own procedures note that increases on a petition must be approved by the Supervisor (Maryland Assessment Procedure Manual, Petition for Review). In our case study, the State's record still described the house before the renovation: fewer full bathrooms, only part of the basement finished, and the building rated in "fair" condition. A closer look could have raised the value.
• It only affects future bills, not the one you've already paid.

Our recommendation in this case

Don't appeal unless something specific lowers the home's value. The buyers were being taxed on roughly what the house is worth today. Their energy was better spent on the steps below.

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What to do instead

1. Confirm your Homestead Tax Credit

Look up your property on the SDAT Real Property Search and check the Homestead Application Status at the bottom of the page. (Here's how to look up Montgomery County property records if you haven't used it before.)

• "Approved" or "Application Received": you're set.
• "No Application": apply right away through Maryland One Stop or by paper (SDAT Homestead Tax Credit). It's a one-time application.

It won't help in your first full year, but after that it caps increases in your taxable assessment at 10% a year in Montgomery County. The biggest payoff comes at your next three-year reassessment, when values can jump.

Good to know: Maryland law requires the person conducting your settlement to give you a copy of the Homestead application at closing. It's easy to lose in the stack of paperwork, so check your closing documents.

2. Ask your lender for an escrow analysis

If your escrow was set up on the old tax figure, ask your lender for an escrow analysis now. That way your monthly payment matches the new bill, and you avoid a large shortage notice later. (How escrow works in Maryland.)

3. Check for income-based help

Maryland's Homeowners' Property Tax Credit can reduce your bill if property taxes exceed a set percentage of your household income. Montgomery County also has credits for some seniors and military retirees. Eligibility rules apply, so check with SDAT and the County.

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Buyer checklist: before you make an offer on a flipped or renovated home

1. Estimate taxes on your offer price. Multiply your price by the combined State and County tax rate for that location. For FY 2027 (July 2026 – June 2027) that's $1.1521 per $100 for a home outside a municipality or urban district (County Council Resolution 20-1141). Bethesda, Silver Spring and Wheaton add a small urban-district rate, and towns like Rockville and Gaithersburg have their own rates. Add non-tax charges like the solid waste fee. The property tax estimator at the top of this page does the math.
2. Compare the SDAT record to the listing. If the listing says "6 bedrooms, fully finished basement" but SDAT shows fewer baths, an unfinished basement or "fair" condition, the assessment hasn't caught up to the renovation yet. Expect your taxes to rise.
3. Look at the assessment history. A big jump between the last sale price and the current assessment is a red flag for a coming increase.
4. Ask whether permits were pulled. Permitted renovations are what typically trigger a mid-cycle reassessment. (Unpermitted work raises different concerns worth discussing with your agent and inspector.)
5. Ask your lender to escrow on the higher, price-based estimate so your payment doesn't jump later.
6. Budget for a possible partial-year bill in the first months after closing.
7. Understand the Homestead first-year gap. You won't get the cap in your first full year of ownership.
8. File your Homestead application right after closing, then confirm it shows on the SDAT record.
9. Note your appeal windows. If you close between January 1 and June 30, you have 60 days from the transfer to appeal. Otherwise, watch for any SDAT Notice of Assessment (45 days) and the January Petition for Review deadline.

Running the rest of your numbers? The real cost of buying a home in Maryland has a buyer closing-cost calculator.

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Frequently asked questions

Why did my property tax go up so much after I bought my house?

Usually for one of three reasons: the home was reassessed at its regular three-year cycle, the State picked up renovations done before you bought, or you lost the previous owner's Homestead cap in your first full year. On flipped homes, it's often all three.

Can I appeal because my tax went up 50%?

Not on that basis alone. Maryland appeals are decided on market value. You'd need evidence the home is worth less than its assessed value.

I paid more than the assessed value. Should I still appeal?

Generally no. A recent purchase price above the assessment is strong evidence the assessment isn't too high, and an appeal could lead the assessor to take a closer look.

When does the Homestead Tax Credit start for a new owner?

Not in your first full tax year (July 1 to June 30) after the purchase. After that, if you've applied and the home is your principal residence, it limits annual increases in your taxable assessment (10% in Montgomery County).

Will my taxes keep going up?

They'll change when tax rates change or when your home is next reassessed. With the Homestead credit in place, increases in your taxable assessment are capped each year.

Does it matter whether I close in December or January?

For appeals, it can. Buyers whose property transfers between January 1 and June 30 get a 60-day new-owner appeal window. Buyers who close in late December don't.

Can my title company handle an assessment appeal?

Title companies handle the closing, but assessment appeals are generally filed by the owner directly with SDAT, sometimes with help from a property tax attorney or consultant.

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Have a question about your property taxes?

If your tax bill surprised you after buying, or you're about to make an offer on a renovated home and want to know what the taxes will really be, I'm happy to look at the public records with you and walk you through your options.

Book a free call with Edward →

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Sources

• SDAT: Assessment Appeal Process
• SDAT: Petition for Review or New Owner Appeal form
• SDAT: Maryland Homestead Property Tax Credit Program
• SDAT: Real Property Search
• Maryland Assessment Procedure Manual: Reassessment Out-of-Cycle
• Maryland Assessment Procedure Manual: Petition for Review
• Montgomery County Council Resolution 20-1141: FY 2027 tax rates
• Montgomery County Finance: County Homestead Tax Credit
• Montgomery County Office of Consumer Protection: Estimated Real Property Tax (§40-12C)
• Montgomery County OLO Report 2018-1: Property tax assessments
• Maryland PTAAB: FAQs

Information is general in nature and current as of October 2026. It is not legal or tax advice. Verify deadlines, rates and eligibility with SDAT, Montgomery County, or a qualified professional.