Hope you folks can help me; I am a longtime lurker, first time poster on this forum. Please pardon the length of the post.

Background: My boyfriend and I bought this 1950's rambler about 15 years ago for $140K; I bought him out when we split up in 2003 for $185K (actual value then about $225K, but our finished basement had been flooded so considerable renovation needed to be done -- I have actually done only a small part of the work.) The neighborhood, a MD suburb of DC, is in decline; over the years the white-collar NASA workers have been replaced first by blue-collar folks and now largely by immigrants, and there are many rentals/vacant homes. The schools are the pits. I stay because I have no children, just a new partner and several cats, the house suits us, and the gardens on my huge fenced lot are finally mature -- plus where would I go? The home's value peaked at about $325K a year ago, and at present there are over 300 homes for sale in my zip code, 85 within a mile radius of the house -- over half of the 300 in foreclosure, so it's hard to determine an actual value -- though it's about $290K according to Zillow.

The issue? I just got my state/county tax assessment, which happens every three years. The valuations do not reflect the current housing slump. They claim my home is now worth $347K, up from $335K 3 years ago. They are phasing in this higher value over the next three years, so in 2011 the assessed value will be the full amount.

Now, I'm not paying taxes on that full amount because MD has a 10% Homestead cap on state taxable assessments for primary residences, so the assessable value cannot go up more than 10% in a given year. There is a 5% cap for my county. The current Homestead value of my property for the county is $198K, and for the state is $250,740. So if the State value goes up by 10% per year for the next three years, my actual base rate will be:

$276K in 2010 (110% of $250,740)

$303K in 2011 (110% of that)

$334 in 2012 (and so forth)

So by next year the base taxable value will be higher than the actual value of the house, even if home prices do not continue to slide.

I called the assessment bureau to learn how to protest this, and they suggested that I shouldn't fight the assessment; they said that the Homestead agency pays the state and county the difference between the unadjusted rate and the Homestead rate -- that the state and county were going to get the tax revenue they need, and I had a choice of fighting the valuation and seeing the overall MD tax rate raised, or NOT fighting and getting Homestead to pay the difference between the capped and actual rates for both state and county.

Have you ever heard of such a thing? Where would the Homestead agency be getting the $$ if not from the state treasury?

The state talked me out of protesting 3 years ago because at that time the max Homestead value even at the end of 3 years was lower than what I estimated to be the actual value of the home.

I have tried to get several REAs to help me get comparables to use to protest the valuation, but they are not returning my calls, even though I have offered a $300 retainer for the assistance with what should be an afternoon's task. Am I offering too little?

I have asked the State to send me the assessment worksheets for my house and the four closest comparables in the subdivision, most of which sold in April 2008 with prices in the $280K range -- there hasn't been much movement since about June. The information I have already checked on my own worksheet appears accurate, just the resulting overall value is way high in light of the recent fall in prices.

Other ideas?

Thanks for your help!

lynnT