Taxes in Baltimore come in several layers on top of federal and Maryland state taxes: a 3.2% local income tax on residents, a real property tax of $2.248 per $100 of assessed value, one-time transfer and recordation taxes when property changes hands, a separate business personal property tax, and excise taxes on hotels, parking, entertainment, and energy. Together they can add thousands of dollars a year to what a Baltimore household or business owes.
Local Income Tax on Residents
If you live in Baltimore City, you owe 3.2% of your Maryland taxable income to the city.1Maryland Comptroller of the Treasury. Withholding Tax Facts January 2026 There is no separate city return. The Maryland Comptroller collects the local tax through your Form 502 and distributes it back to the city.
Employers are required to withhold state and local income tax based on where you live, not where you work, so the 3.2% usually comes out of each paycheck automatically.2Maryland Comptroller of the Treasury. Maryland Income Tax Rates and Brackets If you’re self-employed or have income without withholding, build the local rate into your estimated payments.
Nonresidents who work in Baltimore don’t pay the city’s 3.2%. Maryland instead applies a 2.25% nonresident rate.1Maryland Comptroller of the Treasury. Withholding Tax Facts January 2026 Check that your employer has your residency correctly recorded; a mismatched jurisdiction can mean overpaying all year or owing a lump sum at filing.
Real Property Tax on Homeowners
Baltimore City’s real property tax rate for fiscal year 2025 is $2.248 per $100 of assessed value.3Baltimore City Government. Real Property Taxes On a home assessed at $200,000, that comes to $4,496 a year. The Maryland State Department of Assessments and Taxation sets your assessed value, so any dispute over valuation goes to the state, not the city.
Deadlines and the Early-Payment Discount
Bills are issued annually and must be paid in full by December 31 of the year the bill is issued. Pay by July 31 and the city knocks 0.5% off the total.3Baltimore City Government. Real Property Taxes Partial payments are credited to your account, but the full balance still has to clear by year-end.
Owner-occupants of a principal residence can opt into semi-annual billing. The first installment is due in July and becomes delinquent in October; the second is billed December 1 and becomes past due January 1.3Baltimore City Government. Real Property Taxes Rentals and commercial properties aren’t eligible.
Penalties and Tax Sale
Delinquent property tax accrues 1% interest plus a 1% penalty for each month or partial month unpaid — 2% every month, compounding.4City of Baltimore Law Library. Baltimore City Code Article 28 – Taxes – Section 21-5 Interest and Civil Penalties If the balance stays unpaid long enough, the city can sell the tax lien at a public online auction. The winning bidder gets a certificate, not the house, but that certificate lets them go to court and eventually foreclose. You can stop the process by redeeming the property, meaning paying the buyer for all outstanding claims, interest, and costs.5Baltimore City Government. Tax Sale Information
Homestead Tax Credit
The Maryland Homestead Tax Credit caps how much your taxable assessment can rise each year if the property is your principal residence. Baltimore City sets its cap at 4%, below the statewide 10% maximum.6Maryland Department of Assessments and Taxation. Maryland Homestead Property Tax Credit Program7Maryland State Department of Assessments and Taxation. 2024-2025 Tax Rates and Homestead Credit Caps To qualify you must have owned the property during the prior tax year, lived in it for at least six months including July 1, and not obtained a zoning change that raised its value. The credit is limited to one property, and it limits the taxed portion rather than reducing your home’s market value on paper.
Taxes When You Buy or Sell Property
A Baltimore real estate settlement triggers two one-time city taxes on the sale price, plus a state transfer tax. These sit outside your annual property tax bill.
- City transfer tax: 1.5% of the sale price.8Baltimore City Government. City Tax Rates
- City recordation tax: $5.00 for every $500, or fraction thereof, of the actual consideration paid.8Baltimore City Government. City Tax Rates
- State transfer tax: 0.5% of the sale price, reduced to 0.25% for first-time Maryland homebuyers.9Maryland Courts. Recording Fees
On a $350,000 home, the city transfer tax alone is $5,250 and the city recordation tax adds another $3,500, before the state layer. Who pays what is negotiable between buyer and seller, though local custom often splits the burden.
The Yield Tax on Transactions Over $1 Million
For sales above $1 million, Baltimore directs a portion of the transfer and recordation taxes into its Affordable Housing Trust Fund through the Yield Tax. It takes 40% of the city transfer tax and 15% of the city recordation tax collected on the amount above $1 million.10City of Baltimore Law Library. Baltimore City Code Article 28 – Taxes – Section 17.1-2 Transactions Assessed Tax Rate It’s easy to miss during deal planning if you haven’t closed in the city before.
Business Personal Property Tax
Baltimore’s personal property tax applies to business assets, not household belongings. If your business owns furniture, fixtures, machinery, equipment, or other tangible assets used in the city, the rate is $5.62 per $100 of assessed value — more than double the real property rate.8Baltimore City Government. City Tax Rates
You report these assets on an Annual Report and Personal Property Tax Return filed with SDAT. The deadline is April 15, with an extension available to June 15.11Maryland State Department of Assessments and Taxation. SDAT Extension Request Form Not filing doesn’t get you out of the tax. SDAT can issue an estimated assessment from whatever information it has and bill you off that, plus penalties.
Excise Taxes You Pay Through Purchases
Several city taxes are collected by businesses and passed through in the price you pay.
- Hotel occupancy tax: 9.5% of the room charge for stays under 90 consecutive days, including associated cleaning fees.8Baltimore City Government. City Tax Rates
- Parking tax: 20% of gross receipts from parking lots and garages, whether you park for an hour or a month.8Baltimore City Government. City Tax Rates
- Admissions tax: 10% of gross receipts from entertainment events and other taxable activities.8Baltimore City Government. City Tax Rates
- Energy tax: a per-unit charge on energy delivered to users, measured in therms for natural gas, kilowatt-hours for electricity, pounds for steam, and gallons for fuel oil and liquefied petroleum gas.8Baltimore City Government. City Tax Rates
The 20% parking tax is a large part of why downtown parking bills feel disproportionate to the sticker price.
Stormwater Remediation Fee
The stormwater remediation fee isn’t labeled a tax, but it shows up on your bills and behaves like one. The city charges it on all properties to fund federal clean water compliance. Non-residential properties are billed per “equivalent residential unit,” based on impervious surface area. Single-family homes pay a tiered rate based on property size. The Department of Public Works bills the fee, often on your water bill, and unpaid balances carry the same interest and penalties as unpaid water charges.12City of Baltimore Law Library. Baltimore City Code Article 27 – Stormwater Remediation Fees
How the Federal SALT Cap Hits Baltimore Filers
Baltimore residents who itemize can deduct state income tax, local income tax, and property taxes on their federal return, but only up to the combined SALT cap. For the 2026 tax year, that limit is $40,400 ($20,200 if married filing separately), and the cap begins to phase down when modified adjusted gross income exceeds $505,000.13Internal Revenue Service. New and Enhanced Deductions for Individuals
With Maryland’s state income tax up to 5.75%, Baltimore’s 3.2% local rate, and a $2.248-per-$100 property tax rate, many city homeowners reach the cap before they’ve deducted everything they actually paid. Anything above the cap produces no federal benefit, which is worth pricing into how much house you can afford in the city.
Who Bills What, and Who to Call
The Bureau of Revenue Collections, within the city’s Department of Finance, handles billing, payments, adjustments, and refunds for real property tax, personal property tax, and most other city-level obligations.14Baltimore City Government. Bureau of Revenue Collections15Maryland Department of Assessments and Taxation. Local Tax Billing and Collection Offices Local income tax runs through the Maryland Comptroller’s office, since it’s collected on your state return. Property tax questions go to the Bureau of Revenue Collections; income tax questions go to the Comptroller. Calling the wrong office can cost you weeks.