FY2026 Proposed Operating and Capital Budgets

FY2026 Proposed Budget Introduction

County Tax Rates

Overview Tax revenue is 72 percent of total revenue for the County and is mostly budgeted in the General Fund (the main operating fund of the County). The remaining 28 percent comes from various fees, grants, service charges, miscellaneous rents and investment income. Property Tax This ad valorem tax applies to owners of real property (land and improvements) located in the County.

The tax base for a given fiscal year is the total assessed value of all real property subject to the property tax as of the first of January (the date of finality) immediately preceding the first day of a fiscal year. New construction substantially completed as of July 1 of the fiscal year is taxed for the full year, and new construction substantially completed as of January 1 of the fiscal year is taxed for a half-year. Each year, the Maryland State Department of Assessments and Taxation (SDAT) is required to value one-third of all real property based on a physical inspection prior to the date of finality. Any increase in cash value (market value) is phased in equally over the next three years. All property is assessed at 100% of full cash value. However, many property owners are eligible for the homestead tax credit if the assessment of their owner-occupied principal residence increased more than 5% over the prior year. The County property tax rate for Fiscal Year 2026 is $1.11 per $100 of assessed value with five cents being dedicated to school construction. A rate is proposed by the County Executive and passed by the County Council which is required by the County Charter to levy a tax rate necessary to balance the budget. Also in the property tax classification is the electric lighting tax and the payment in lieu tax. Electric lighting is a tax applied to the assessable value of a property within designated areas of the County to provide street lighting. Payment in Lieu is a payment made to the County to compensate for property tax otherwise “lost” due to owner exemption or other negotiated arrangements.

SDAT property valuation map of Frederick County:

Assessment Area 1 was reassessed for January 1, 2025 (Effective FY2026) Assessment Area 2 will be reassessed for January 1, 2026 Assessment Area 3 will be reassessed for January 1, 2027

Area 1

Area 2

Area 3

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