PA vs MD Taxes

When it comes to buying a new construction home, taxes can be a deal breaker. We evaluated the difference between PA and MD taxes to help you direct your homebuying search if you are in between both locations. In the following scenarios, we use York, PA, and Frederick, MD for comparison specifically as these are both locations where homesites are available now! 

Income Tax

There are a few key differences between the way these two states do taxes. With income tax, Maryland breaks their tax rate into income brackets. The taxes for these brackets range from 2% up to 5.75% based on annual income. In PA, everyone gets the same tax rate at 3.07% no matter your income. Additionally, MD gives tax exemptions for dependents, whereas PA does not. We ran a few scenarios to see what these differences look like in real-time. 

According to smartasset.com, a couple filing jointly with 2 dependents making a combined income of $150,000 will have a take-home pay after taxes (including federal, state, and local tax) of $114,299 in York, PA. This same couple would have a take-home pay of $110,046 in Frederick MD, a variance of $4,253. We also ran the numbers for a single person with two dependents and an income of $75,000 and found the take-home pay in York, PA to be $57,148, while the take-home pay in Frederick, MD would be $1,729 less at $55,419 after taxes. 

Property Tax

When it comes to property taxes, the average county tax rate in York, County on a home valued at 600,000 is 1.910% making annual property taxes around $11,460 just in York County alone. However in Frederick, MD with the same parameters, the average county tax rate is 1.100% making the annual taxes $6,600 for a total savings of $4,860. 

One thing to consider when weighing your options is the average price of a home in PA and MD which will alter the total property taxes. Pricing can be affected by home size and the level of customization made to your home.

Learn More About New Home Financing

Overall, with property and income tax taken into consideration, we found that it is cheaper to live in York, PA than in Frederick, MD, despite the income tax break for dependents and lower property tax in MD. View all available communities in York, PA with an easy commute to Maryland here. 

Our New Home Advisors are experts at providing information regarding all aspects of pricing for your new construction home! For more information and to schedule an appointment with our team call 717-368-9831 or reach us at info@keystonecustomhome.com. 

All figures were calculated using smartasset.com in March 2024.