A's on Semiannual Property Tax Payment
is the difference between annual and semiannual tax payments?
As of in July of 2000, the taxes for your primary residence will
be paid in two installments: one by September 30, and one by December
31; you still have the ability to elect a one-payment schedule.
was the law changed?
To reduce closing costs for home buyers. By moving to a two-payment
property tax system, persons buying homes will pay less property
tax at settlement.
have heard I will get a big tax refund. Is it true?
you have a mortgage, your lender typically pays your property
taxes annually from your escrow account. Part of your monthly
payment to your lender, or escrow agent, includes an amount equal
to one-twelfth of your annual property tax bill. By switching
from one to two payments, you will create a one-time surplus in your escrow account that must be returned to you. Technically,
this is not a tax refund, but a refund of surplus funds in your
must I do to obtain my refund?
Your escrow agent annually calculates the amount needed to pay
property taxes, insurance, and other charges for the next year
for your property. Each year you receive a copy of that escrow
analysis. If there is a surplus in your escrow account, the escrow
agent will send you a check for that amount. The timing of the
escrow analysis and the resulting payment of any surplus amounts
varies by lender, but is frequently done after the end of the
have also heard that this will cost me money. Is that true?
the two-payment plan, the local governments may add a service
fee of up to 1.65% of the second payment to your tax bill. This
amount is to compensate the local government for lost interest
and additional administrative expenses of sending two tax bills.
This fee will be added to the second payment. Click here for a list of service fees imposed
by county and municipal governments.
much money will I get back?
can get a rough idea of the amount of surplus escrow funds that
will be rebated as follows:
at your last tax bill, and find the amount for your property
taxes only. Do not include additional fees that may be on
your tax bill such as front-foot assessments, trash collection,
or other taxes not based on the assessment on your home.
that amount by 12. This is roughly what you pay in property
taxes each month to your lender.
your county in the list below to get the multiplier:
does the refund differ in different counties?
payments are generally made by lenders at the latest date possible.
Some counties offer a discount for paying the tax bill before
September 30. If a county offers this discount, federal law requires
your escrow agent to take advantage of it because it saves you
money. Since everyone's second payment will be due by December
31, and the first payments are made at different times, there
is a difference in the number of months between the two payments.
The refund you get is based on the amount of time between the
first payment and the second payment.
Note: Not all of the provisions of this law apply in
Frederick County, for which there is a different statutory arrangement
for property tax payments. Contact your lender to find out how
and when your taxes will be paid and what effect any change may
have on your escrow account.
I still get my early payment discount?
your county limits the discount to taxpayers paying the full amount
in one payment, you will still get your early payment discount,
but it will only be on the part of the payment made by the early
payment deadline (usually July 31 or August 30).
other factors may affect my refund?
are other items that may be paid by your escrow agent. The most
common is your homeowners insurance premium. If your insurance
premium goes up, this will reduce the surplus in your escrow account,
and thus the refund you will get. Also, if your property assessment
is increasing, and your local government does not reduce taxes
to offset this increase, your taxes will go up, reducing your
refund. Local governments that do not decrease their tax rate
to offset the increase in assessments are required to publish
advertisements in a local newspaper advising property owners that
their taxes will be increasing. This information will also be
included on your tax bill under the heading "Constant
Yield Tax Rate."
other charges on my tax bill paid in two installments?
other fees are sent on the same bill along with your property
tax, such as garbage collection, sewer & water, or other fees,
they may all be due with the first half of your tax.
* * * * * *
you have questions about your property tax assessment contact your local assessment
For tax payment
information contact your county finance (or treasurer/ comptroller) office.