Constant Yield Information
Posted on: May 8, 2020 - 11:15am
Please see the attached documents for more information about Constant Yield.
Constant Yield Tax Rate
The Constant Yield Tax Rate is calculated by the State for each taxing authority in Maryland. It represents the Real Property Tax Rate for the coming tax year that would generate the same amount of revenue (collect the same amount of tax dollars) in FY21 that was generated during the current tax year (FY20). As assessments increase, the Constant Yield Tax Rate decreases. Implicit in this concept is the idea that, if the Mayor and Council set a FY21 tax rate at or below the FY20 tax rate, this would still represent a tax increase if it is higher than the constant yield tax rate. When a taxing authority, e.g. the Town of Cheverly, plans to impose a Real Property Tax Rate that is higher than the Constant Yield Tax Rate, it must advertise the tax increase and hold a public hearing. If the taxing authority plans to set its FY21 Real Property Tax Rate at the FY20 level, but above the Constant Yield Tax Rate, it must be advertised, and a hearing must be held.
Please note that Town property taxes represent only a small portion of your property tax bill.
Single Family Homes (SFH) (Assessed value in FY21 approx. $719.173m)
The Town of Cheverly’s current tax rate for single-family homes is 0.51
($0.51 on every $100 of assessed property value).
Cheverly’s constant yield single family home property tax rate is 0.4858. This is the rate that the Mayor and Council would need to set for FY21 in order to collect the same number of tax dollars ($3,493,746) in FY21 as was collected in FY20.
At the current rate of $.51, the Town has a potential 0.0499% increase in single family home property tax revenue, which translates into a potential $174,374.81 in additional collections for FY21.
For a home assessed at $350K, maintaining the 0.51 rate in FY21 the homeowner would pay the Town approximately $87 more in FY21 than she/they paid the Town in FY20.
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- Lowering SFH tax rate to 0.50 would exceed constant yield by .0292% (resulting in $102,124.13 additional single-family home revenue over FY20).
- Lowering SFH tax rate to 0.49 would exceed constant yield by .0086% (resulting in $30,205.83 in additional single-family home revenue over FY20).
- Increasing SFH tax rate to 0.52 would exceed constant yield by 0.0703% (resulting in $244,961.75 additional single-family home revenue over FY20).
- Increasing SFH tax rate to 0.53 would exceed constant yield by 0.0910 % (resulting in $317,880.38
- additional single-family home revenue over FY20).
Multifamily Apartments (Assessed value in FY21 approx. $38.222m)
The Town of Cheverly’s current tax rate for Multifamily Apartments is 0.66
($0.66 on every $100 of assessed property value).
The constant yield multifamily property tax rate is 0.6270 (maintaining revenue of $239,654).
Per the Maryland Department of Assessments and Taxation memorandum, dated 14 February 2020, the Town of Cheverly is exempt from constant yield reporting (i.e. the Town is not obligated to hold a hearing) for the multifamily units in its jurisdiction, as the potential differential in property tax revenue between the real property tax rate and the constant yield tax rate falls below the $25,000 threshold.
| Attachment | Size |
|---|---|
 cheverly_apartments_in_prince_georges_county.pdf | 196.98 KB |
| cheverly_excluding_apartments_in_prince_georges_county.pdf | 197.64 KB |
| x_cytr_memo_to_exempt_municipalities.pdf | 155 KB |