ROCKVILLE, MD (May 20, 2016) – The Montgomery County Council unanimously adopted $325 million in new taxes on homeownership this week as part of its deliberations on the Fiscal Year 2017 budget. The Council adopted an increase in the home sales recordation tax on Wednesday and an 8.7 percent increase in the property tax on Thursday. The council is expected to adopt the full budget next week.

“County politicians just delivered homebuyers a 1-2 punch,” said Christopher B. Summers, president of the Institute.  “Montgomery County already has the State’s highest per capita income tax burden, so making homeownership more expensive only adds to the list of reasons a family should avoid planting roots here.  Homebuyers should be viewed as a source of pride, not a source of new tax revenue. The new taxes will also hurt county realtors, who depend on a healthy home buying market for economic security.”      

Tax Increase Summary:

• Property Tax Increase:  The Council enacted an 8.7 percent increase in property taxes, pushing the County’s tax rate higher than all surrounding jurisdictions. The average property owner in Montgomery County will now pay $326 more in property taxes every year.  County Executive Ike Leggett has stated he expects the increase to raise approximately $140 million from homeowners.
  
  

•  Recordation Tax Increase: The Council also approved a $180 million increase in the recordation tax on home sales.  Under the new tax structure, a house sold for $600,000 would cost about $1,000 more in recordation taxes.
  
  

About the Maryland Public Policy Institute: Founded in 2001, the Maryland Public Policy Institute is a nonpartisan public policy research and education organization that focuses on state policy issues. The Institute’s mission is to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society.  Learn more at mdpolicy.org.

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