Maryland Assessment Procedure Manual

Category:	Exemptions
Category No.:	009
Subject:	Transfer of Property
Subject No.:	150
Topic:	Exempt Entity to Non-exempt Entity
Topic No.:	15
Date Issued:	8/9/2016
Revision Date:	3/28/2018
For tax years beginning July 1, 2014, property that is exempt under Tax-Property Article (“TP”), §7-202 and §7-204 and sold to a new owner will be taxable from the date of transfer if the property no longer qualifies for exemption after the sale. To administer this provision, the local supervisor must send a notice of assessment to the new owner because this is a “change in classification” under TP §8-401(b)(2). The notice must advise the new owner of the now-taxable status of the property for the current taxable year in which the proration in taxes are determined. The notice is to include all the information as provided in TP §8-401(c) & (d). The supervisor already has a value on the transferred exempt property that is required under TP §7-106 and you may use that value for the new taxable assessment notice. However, the supervisor is not precluded from changing that value if deemed to be inaccurate. The former exempt owner has never been notified of the value the supervisor has made. The new owner is being sent a notice because the supervisor is establishing an “initial real property value” for taxable assessment purposes under TP §8-401(b)(3). It should be noted that only disabled veterans, surviving spouses of disabled veterans, and the blind are currently notified of exempt values by SDAT. No other exempt property, including charitable, educational and religious exempt property, receives notices of the value of their exempt property. All Exempt Use changes which result in a prorated tax bill must have a notice generated from the AAVS database for the tax year in which the prorated bill is due. The Property Use Code must be changed to the appropriate taxable classification and exemption removed in all applicable databases with AAVS (Prior Year(s), PROD, & FUTURE). Careful review of the Taxable Tab (located in Phase-In Screen) should always be completed after adding or removing an exemption. Example: A church owned property being used as a parsonage and receiving a religious exemption transfers with a transfer date of September 1, 2016. The property is taxable as of September 1, 2016. The Property Use Code “E” must be changed to Property Use Code “R” and the Exemption Code deleted from the Exemption Tab in the AAVS 2016_17 Prior Year Database. PROD Database, and FUTURE Database (if part of the upcoming Reassessment Group). The Out-of-Cycle Notice is generated from the 2016_17 Prior Year Database. An “Addition Form” is to be completed and submitted to the local Treasurer’s or finance Office for the prorated taxes due.

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