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Bill

HB 78

Property Taxes - Authority of Counties to Establish Subclasses and Set Separate Rates for Land and Improvements to Land

2026 Regular Session Introduced by Vaughn Stewart

Allow Maryland counties to set separate tax rates for land versus building improvements rather than one uniform property tax rate.

Hearing 1/27 at 2:00 p.m.
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Bill Summary · HB 78

Legislative bill overview

HB 78 would authorize Maryland counties to establish separate property tax subclasses and set different tax rates for land versus improvements (structures and buildings) on that land. Currently, counties must apply a uniform tax rate to the total property value. This change would allow counties to implement a "split-rate" or "land value tax" system if they choose to do so.

Why is this important

This represents a fundamental shift in how local property taxes could be structured. Supporters argue split-rate systems incentivize development and reduce speculation by taxing land more heavily than structures, potentially making housing more affordable and encouraging property owners to develop vacant land. Critics worry it could increase taxes for certain property owners, complicate administration, and shift tax burdens unpredictably across different neighborhoods and property types.

Potential points of contention

  • Tax burden shifting: Some property owners—particularly those with valuable land but older structures—could face significantly higher tax bills, while others benefit, raising fairness concerns
  • Implementation complexity: Counties would need new assessment systems to separately value land and improvements, increasing administrative costs and potential assessment disputes
  • Market uncertainty: Changing incentive structures for land development could have unpredictable effects on property values, investment patterns, and local economies across different county contexts

Compiled from official sources — confirm details with the bill’s official record.

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