Special community benefit district taxes in Anne Arundel County

A separate charge on some tax bills

Every Anne Arundel County property tax bill carries the county and state property tax. The county says a bill can also carry other items, such as a solid waste charge for trash and recycling, a stormwater fee, a Bay Restoration fee and special community benefit district taxes. That last item is the subject of this guide. Owners in a district pay it every year for something their neighborhood shares, and the county collects it with the rest of the bill.

The county has three kinds of special taxing district:

• Special community benefit districts (SCBD). The county says these have paid for upkeep of community property, including community-owned roads, improvements to community facilities, special security, and insect and pest control.
• Shore erosion control districts (SECD). These pay for building, repairing and maintaining erosion control, such as bulkheads.
• Waterways improvement districts (WID). These pay mainly for dredging channels.

Bill 33-26, which sets the charges for FY2027 (July 1, 2026 - June 30, 2027), covers 95 districts: 77 community benefit districts, 14 shore erosion control districts and 4 waterways improvement districts. Many have waterfront names, but not all are on the water: Crofton has one too.

How a district is set up and run

According to the county’s Office of the Budget:

• The County Council creates each district by law. Changing its boundaries, its purpose or the way it taxes also takes legislation. A new community benefit district needs “yes” petitions from two-thirds of the property owners in the area.
• A community or civic association runs it. Under the County Code, the association administers the district and its money. It may not hire a management company to do so.
• The community decides what to raise each year. The association sends the county a budget request for the next fiscal year, due by January 31, and the Council fixes all the districts’ charges in one law. This year’s, Bill 33-26, passed on June 11, 2026 and took effect on July 1, 2026.
• The county collects and passes on the money. The Office of Finance usually pays it out to the associations in November, February and June. The county says a district is not part of county government and is not a homeowners association.

The county says most shore erosion and waterway projects are paid for with no-interest state loans made to the county on the district’s behalf, which the district tax repays. Associations can also take out commercial loans for projects. A charge that is repaying a loan may stay on the bill for years, so ask the association what the money pays for before you buy.

What districts charge this year

The charges vary widely. A few examples from Bill 33-26, for FY2027 (July 1, 2026 - June 30, 2027):

How a district charges matters as much as the amount:

• A flat amount per tax account. Every home in the district pays the same, whatever it is worth.
• Per lot. Some districts charge per platted lot or per improved lot rather than per account. That matters when a property is made up of more than one lot.
• Improved property only. Several districts charge only lots with a house on them. On a vacant lot in one of these, the charge may begin once a house is built.
• Per $100 of assessed value. The charge rises with the assessment. For a rough figure, find the property’s phased-in assessment for this tax year on its SDAT record, divide it by 100 and multiply by the district rate.
• Other bases. One waterway district charges per share. Another charges every account in the district and adds a second charge for waterfront accounts.

Do not count on the homestead credit to hold down a value-based district charge. In a December 2014 opinion, the Maryland Attorney General agreed with the County Attorney that the credit does not apply to any of the three kinds of district tax. The homestead cap can limit the yearly rise in your county tax (2% a year) and, in Annapolis, your city tax (10% a year), but under that opinion a district rate is charged on the full assessment. The tax bill shows how the district charge was actually figured.

How the district tax is prorated at settlement

Anne Arundel’s tax year runs from July 1 to June 30. Bills go out in July and cover the whole tax year. The county says the full year can be paid without interest from July 1 and is due by September 30, unless the owner of a principal residence pays in two halves (see below). So a seller who has paid has usually paid ahead. Maryland sales contracts commonly have the year’s property taxes adjusted (prorated) to the settlement date, and the district charge is normally adjusted with the rest of the bill: the seller bears it for the days before settlement, and the buyer from settlement on. Your contract sets the exact terms.

A worked example. To keep the sums simple, take a made-up district charge of $730 for the year, or $2 a day. (It is not any real district’s charge.)

• The seller paid the whole year’s bill in the summer.
• Settlement is on March 31, 2027.
• March 31 to June 30 is 92 days, counting settlement day, so the buyer’s share is 92 × $2 = $184.
• The settlement statement charges the buyer $184 and credits the seller $184. The seller bears the other 273 days, or $546.

This example charges the buyer for settlement day. Some contracts count that day as the seller’s instead, which moves one day’s charge from the buyer to the seller.

If the bill were still unpaid, it would normally be paid from the settlement funds, with $546 charged to the seller and $184 to the buyer. An unpaid bill also carries interest and penalties, which the county starts charging on October 1. Your own figures depend on your district, your settlement date and how your contract counts the settlement day.

Three timing points come up often:

• Settling near July 1. This year’s charges were set in June and took effect on July 1, when the new tax year began. A settlement on or after July 1 falls in the new tax year, so it is prorated on the new year’s charges, not last year’s.
• Bills paid in two halves. The tax on a principal residence can be paid half by September 30 and half by December 31, with a service charge on the second half. Part of the bill may still be unpaid at settlement, so we check what has been paid, item by item.
• Your mortgage escrow. If your lender collects taxes monthly, the escrow has to cover the whole bill. Give your loan officer the actual bill, district charge included, not an estimate based on the county rate alone. Our article on escrow accounts explains how they work.

Recordation and transfer taxes are a different thing

A district charge is a yearly tax on owning the home. It is not one of the one-time taxes due when the deed is recorded: the state transfer tax, the county transfer tax and the recordation tax. For those, use the estimator above. At the county median price of $509,990 they total $11,219.85. On a home sale, Maryland law presumes buyer and seller share them equally unless the contract says otherwise. When the buyer is a first-time Maryland home buyer who will live in the home, more of these taxes fall on the seller; the estimator has a switch for that. Enter your own price to see your figures, or read the Anne Arundel County closing costs guide.

Where the district charge is checked

1. Before you sign. Buyers and agents should ask for the seller’s latest tax bill. A tax figure in a listing may leave the district charge out.
2. During the title search. The search covers the land records and the tax records, which show whether the home pays a district charge, how much, and whether the bill is paid.
3. On the settlement statement. The county, state and district charges are prorated to the settlement date, and the figures go to the lender and to both sides for review.

When settlement is done, the deed is recorded with the Clerk of the Circuit Court for Anne Arundel County, Land Records Department in Annapolis, and the transfer and recordation taxes are paid at recording. We send wiring instructions by email, and criminals send fake ones the same way. Before you wire money, call our office at (410) 768-2300, the number on this website, to confirm the instructions; never use a phone number taken from an email. Our wire fraud warning explains the scam. Our buyer’s checklist and seller’s checklist list the other steps.

Title points in district neighborhoods

Many waterfront and older subdivisions are districts, and those neighborhoods raise their own questions:

• Use of the shared beach, pier or road. The district pays to keep up community property, but a right to use it comes from elsewhere: the deed, the plat, recorded covenants or easements, or membership in the association that owns it. The title search looks at these, so a buyer knows what goes with the lot.
• Older plats. Fences, sheds and driveways in older subdivisions do not always match the recorded plat. A survey shows where the lines are.
• The critical area. The Chesapeake Bay critical area generally takes in land within 1,000 feet of tidal water or tidal wetlands. There, clearing, building and paved surfaces near the water are limited. Maryland law requires a critical area notice and a military installation notice in a contract of sale, and a contract for a home in Anne Arundel also needs the county land-use plan notice. Our critical area guide goes further.
• An HOA as well as a district. A neighborhood can have a district and a homeowners association. HOA dues are billed by the association and handled separately at settlement.
• Deferred water and sewer charges. The county has let some qualifying owners defer certain water and sewer connection charges and front foot benefit assessments. A deferred charge can remain a lien on the home, so ask early whether the seller has one; the payoff figure can then be ordered before settlement.
• Estates. When a home is part of a probate estate, the personal representative appointed through the Register of Wills normally signs the deed, so the estate has to be opened first. A home that passes outside probate, for example to a surviving joint owner or through a trust, is handled differently. Our deeds and family transfers service covers these sales; see also selling an inherited house.

Settling a district home with Maryland First Title

Maryland First Title is an attorney-led title and settlement company, serving Maryland since 1994. Our attorneys can meet you anywhere in Maryland at no extra cost, hold meetings online, or host you at 306 Crain Hwy N in Glen Burnie, and weekends and after hours are available by appointment. See our residential settlement service. For local detail, read our guides to Crofton, Pasadena, Annapolis, Severna Park, Arnold and Edgewater.