The annual tax figure on an Annapolis listing is the bill a particular owner paid after years of Maryland's Homestead Tax Credit kept their taxable assessment down. Buyers rarely get that credit right away. If you're comparing two homes with Annapolis addresses, two things decide the bill you'll actually pay, and neither shows up in the listing's tax line. One is which side of the city line the house sits on. The other is how long the seller owned it.

Homes inside the city pay a higher rate, but the homestead reset narrows that gap once the house changes hands. The reset costs the most outside city limits, on the homes whose tax lines look cheapest.

Two Rate Stacks Behind One Mailing Address

For the fiscal year running July 1, 2026, through June 30, 2027, Anne Arundel County publishes two tax rate stacks that matter here. A home in unincorporated Anne Arundel pays a County rate of $0.968 and a State rate of $0.112, for a total of $1.080 per $100 of assessment. A home inside the City of Annapolis pays $0.577 to the County, $0.738 to the City, and $0.112 to the State, for a total of $1.427, according to the County's current tax rates page. The County Council passed this budget unanimously on June 11, 2026. It was the last budget County Executive Steuart Pittman presented, and it lowered the county property tax rate.

The mailing address won't tell you which stack applies. The Capital Gazette reported that an Annapolis mailing address or a 21401 or 21403 ZIP code doesn't mean a property sits inside the city limits or owes City taxes. The state's own records settle it, using town codes that flag properties inside municipal boundaries.

The Cap That Changes With the Deed

Maryland requires every county and municipality to limit yearly growth in a principal residence's taxable assessment to 10% or less. Anne Arundel County sets its limit at 2%. The City of Annapolis sets 10%, and that cap applies only to taxes the City levies, as the County explains on its FY27 tax information page for the City. The state's FY27 table lists the same 2% for Anne Arundel County and 10% for Annapolis.

Values have been climbing much faster than 2%. When the Maryland Department of Assessments and Taxation released its 2026 reassessment on December 30, 2025, residential full cash value in Anne Arundel's Group 2 had risen 16.0% between January 1, 2023, and January 1, 2026. Those increases phase in evenly over three years. At the county level, that averages a little over 5% a year. That's well above the County's 2% cap and well below the City's 10%.

The credit doesn't follow the house. Under the SDAT Homestead Tax Credit rules, a property qualifies only if it wasn't transferred to new ownership during the previous tax year. It also has to be the owner's principal residence, occupied for at least six months of the year, including July 1. So the gap between full assessment and capped assessment that a long-time owner has built up goes away when the deed changes, and the buyer starts paying on the full assessed value.

Running the Same House Through Both Stacks

Here's an illustration using the published FY27 rates. Picture the same house in two places. Both have a full assessment of $800,000. In both cases a long-time owner's County taxable assessment has been held to $650,000 by years of the 2% cap. These are hypothetical numbers chosen to show the mechanism. Real homes will differ, and the State's own 10% cap is left out to keep the math simple.

Three things show up in that table.

First, the reset costs more outside the city. The 2% cap only protects the County share. Outside the city that share is taxed at 96.8 cents, and inside it's taxed at 57.7 cents, so the same $150,000 gap in capped value is worth more on an unincorporated parcel.

Second, the City's own levy barely moves at the sale in this example. With a 10% cap and an average phase-in of around 5% a year, that cap would rarely bind on the City share, so the seller was probably already paying close to the full City share.

Third, the gap between the two listings is bigger than the gap between the two houses. The sellers' bills are $3,362.50 apart. The buyers' bills are $2,776 apart. Comparing tax lines across listings partly compares how long two different families owned their homes.

What the Rest of the Bill Does

Fees beyond the tax rate mostly cancel out, so most of the difference comes from the rate and the reset. Under the City's adopted FY27 fee schedule, trash collection for a dwelling unit inside the City costs $463.72 a year, up from $431.34. The County's charge for properties on County curbside collection is $469 a year.

Water and sewer come from different utilities depending on the side of the line, and their pricing works differently:

• City of Annapolis, effective July 1, 2026: Residential water costs $5.00 per 1,000 gallons up to 7,000 gallons, $10.00 per 1,000 from 7,001 to 20,000, and $14.99 per 1,000 above that. Sewer costs $6.88 per 1,000. A meter of 1 inch or less carries quarterly fixed charges of $15.84 for water and $15.65 for sewer.
• Anne Arundel County, effective July 1, 2026: Water costs $3.98 and wastewater $7.00 per 1,000 gallons, each up 9%. Starting with the second FY27 billing cycle, a new Utility Investment Fee adds $5.61 for water and $14.92 for wastewater on meters under 1 inch, and most residential customers are billed quarterly.

The City's tiers mean heavy water use costs more inside the city limits, but a typical household's utility bill won't come close to the property tax difference.

The Next Reset Is Already Scheduled

Assessment Area 3 in Anne Arundel County gets new values effective January 1, 2027. Area 1 follows in 2028. Last cycle, SDAT mailed notices on December 30. Appeals have to be filed within 45 days of the notice date, according to SDAT's appeal process page. If you go under contract on an Area 3 home before January 1, the listing's tax line will reflect a value that's about to be replaced, and any increase will phase in from there.

New owners also have a deadline of their own. SDAT mails a homestead application to new purchasers once the deed is recorded. The County notes that applications must be filed by December 31 to qualify for the credit starting the following July 1. Your own capped growth starts from your new base.

Checking a Specific Address

You can check any address in a few minutes on public records:

1. Look up the property in SDAT's Real Property Search and note the town code, which tells you whether it's inside a municipality.
2. Compare the full assessed value with the taxable figure behind the seller's bill. A wide gap usually means a homestead credit that won't carry over to you.
3. Scroll to the bottom of the record for the homestead application status.
4. Multiply the full assessment by the FY27 rate stack that applies, $1.080 or $1.427 per $100, to estimate your first full bill.

This post is general information, not tax, legal, or financial advice. Confirm your own figures with SDAT, the County, your lender, or a tax professional before you rely on them.

FAQ

Does the County's 2% cap apply to homes inside Annapolis?

Yes, but only to the County share of the bill. The City's 10% cap governs City taxes.

If the seller has a homestead credit, do I get it at closing?

The credit depends on no transfer to new ownership in the prior tax year, so you'll need to establish your own eligibility.

Can I pay the tax bill in two installments?

For a principal residence, yes. Half is due September 30 and the rest on December 31, and the second payment carries a 0.87% service charge.

If you're weighing two Annapolis addresses and want to know what each will cost to own, not just what the seller paid, Robert Weitzman can pull the records, run the numbers on both sides of the city line, and talk them through with you. Request a Confidential Home Valuation or Private Consultation.