Maryland vs. Virginia vs. Washington, DC Taxes: 2026 Update

Is there a big difference in tax rates in Maryland, Washington DC, and Virginia? They are all geographically very close to each other. It is not uncommon for homebuyers to consider all three areas when looking for a new home. One consideration beyond neighborhoods, commute time, and schools is taxes. All kinds of taxes!

This article provides a comprehensive comparison of tax rates across various categories in Maryland, Washington DC, and Virginia. I’ll review income tax, sales tax, property tax, corporate tax, and estate tax. This analysis aims to shed light on the differences and similarities in tax rates among these jurisdictions. It will help readers make informed decisions regarding their home purchase and financial planning.

All information subject to change as tax rates change over time. Updated for 2026. Double check your own sources at the time of reading.

Income Tax Rates Comparison

Maryland Income Tax Rates

Maryland’s income tax rates range from 2% to 6.5%, depending on taxable income and filing status. Maryland residents also pay a county income tax, generally ranging from 2.25% to 3.30%. Montgomery County’s 2026 rate is 3.20%.

A single filer with $150,000 of taxable income would be taxed $5,947.50 plus 5.25% of the excess over $125,000.

The difference between $125,000 and $150,000 = $25,000

So take $25,000 x 5.25% = $1,312.50

Your final tax bill for Maryland state income taxes is $5,947.50 + $1,312.50 = $7,260.

$7,260 represents 4.84% on $150,000 in taxable income.

However, among these three jurisdictions, Maryland is unique in imposing county income taxes in addition to state income taxes. Those county taxes generally range from 2.25% to 3.30%. So you need to add that tax to the 4.84% to get a truer sense of the tax burden.

In Montgomery County MD this could mean 3.2% for the county + 4.84% for the state of MD = 8.04%

Washington DC Income Tax Rates

Washington DC’s income tax rates range from 4% to 10.75%. Washington, DC uses graduated tax brackets, meaning different portions of income are taxed at different rates.

DC taxable income	Rate
First $10,000	4.0%
$10,001–$40,000	6.0%
$40,001–$60,000	6.5%
$60,001–$250,000	8.5%

Assuming a single filer has $150,000 of taxable income:

• First $10,000 × 4% = $400
• Next $30,000 × 6% = $1,800
• Next $20,000 × 6.5% = $1,300
• Remaining $90,000 × 8.5% = $7,650
• Total estimated DC income tax: $11,150
• Effective DC income-tax rate: 7.43% of taxable income

Virginia Income Tax Rates

Virginia’s income tax rates also charge a fee based on income range, and then a percentage ranging from 2% to 5.75%. But when you see the tables in the tax charts in the link above, you will see most incomes will be charged a $720 flat fee + 5.75% over $17,000 in income.

A single filer with $150,000 of taxable income would be taxed  $720, plus 5.75% of the excess over $17,000.

The difference between $17,000 and $150,000 = $133,000

So take $133,000 x 5.75% = $7,647.50

Your final tax bill for Virginia income taxes is $720 + $7,647.5 = $8,367.50.

$8,367.50 represents 5.58% on $150,000 in taxable income.

Maryland = 4.84% + 3.2% estimated for county = 8.04%

Washington DC = 7.43%

Virginia = 5.58%

CONCLUSION – INCOME TAXES

As you can see, a single filer with $150,000 of taxable income would pay the most in Montgomery County, Maryland. Washington, DC would be second, and Virginia would be the least expensive.

 

Sales Tax Rates Comparison

Maryland Sales Tax Rates

Maryland’s sales tax rate is generally 6%, applying to most goods and services.

Buying $300.00 in clothing would result in $18.00 in sales taxes.

Washington DC Sales Tax Rates

Washington DC’s sales tax rate is 6.5% beginning October 1, 2025 through September 30, 2026 and 7.0% beginning October 1, 2026.

So as of the writing of this blog, buying $300.00 in clothing would result in $19.50 in sales taxes.

Virginia Sales Tax Rates

Virginia’s sales tax rate is 5.3% – 7%. The sales tax rate for most locations in Virginia is 5.3%. Several areas have an additional regional or local tax which you can read more about in the above link.

In Northern VA it is 6%.

Buying $300.00 in clothing in Arlington VA would result in $18.00 in sales taxes.

CONCLUSION – SALES TAXES

Maryland and Northern Virginia generally impose a 6% sales tax. Washington, DC currently imposes 6.5%, increasing to 7% on October 1, 2026.

 

Property Tax Rates Comparison

Maryland Property Tax Rates

Maryland’s property tax rates vary by county, with an average effective rate of approximately 1.08% of assessed value. But this varies quite a bit from county to county, and sometimes varies from town to town in the same county.

Montgomery County, Maryland, has a property-tax rate of approximately 0.782% of assessed value.

Rockville the average rate is 1.074%

Takoma Park it is 1.334%

Chevy Chase Village is .8532%

The Town of Chevy Chase is .792%

On an $800,000 home in Rockville your property taxes would be:

$800,000 x 1.074% = $8,592/year

Maryland  has a Homestead Tax Credit which generally limits annual increases in the taxable assessment of an eligible owner-occupied home to 10% statewide, although counties and municipalities may impose lower limits.

 

Washington DC Property Tax Rates

Washington DC’s property tax rates are $0.85 per $100 of assessed value, equivalent to 0.85%.

There is a Homestead Deduction in Washington DC which allows for reducing the taxable value by $91,950, if you live in the property as your primary residence.

On an $800,000 primary residence home in Washington DC your property taxes would be:

$800,000 – $91,950 = $708,050

$708,050 x .85% = $6,018/year

 

Virginia Property Tax Rates

Virginia’s property tax rates also vary by county, with an average rate of around 0.81%. And additional district levies may apply in some counties.

Fairfax County’s 2026 base real-estate tax rate is $1.12 per $100 of assessed value, equivalent to 1.12%. Be careful not to confuse Fairfax County with the independent City of Fairfax, which has its own tax rate.

Arlington County’s 2026 real-estate tax rate is $1.053 per $100 of assessed value, equivalent to 1.053%.

On an $800,000 home in Arlington that is a primary residence, your property taxes would be:

$800,000 x 1.053% = $8,424/year

CONCLUSION – PROPERTY TAXES

Property taxes in the three areas are hard to compare since there are so many counties in each. In general Maryland and Virginia are about the same, with Washington DC being cheaper.

 

Corporate Tax Rates Comparison

Maryland Corporate Tax Rates

In Maryland, the corporate tax rate is 8.25%.

Washington DC Corporate Tax Rates

In Washington DC, the corporate tax rate is 8.25%.

Virginia Corporate Tax Rates

Virginia has a flat corporate income tax rate of 6%, making it a more tax-friendly option for corporations.

CONCLUSION – CORPORATE TAXES

Virginia comes in lowest, with Maryland and Washington DC being higher, and the same.

Estate Tax Rates Comparison

Maryland Estate Tax Rates

The tax rate for the Maryland estate tax is graduated. It starts at 8% and tops out at 16%. It depends on the value of the estate.

The threshold for the Maryland estate tax is currently $5 million. This means you only get taxed on estates valued over $5 million.

Maryland’s estate-tax exclusion is currently $5 million per individual. Maryland allows a surviving spouse to use a deceased spouse’s unused exclusion in certain circumstances, potentially giving a married couple a combined exclusion of up to $10 million. However, this is not automatic. The appropriate Maryland estate-tax return and portability election generally must be filed after the first spouse’s death. Consult an estate-planning attorney or tax professional to ensure the required planning and filings are completed.

Washington DC Estate Tax Rates

Washington DC imposes estate tax rates ranging from 11.2% to 16% on estates valued above certain thresholds. The estate tax is progressive, which means the higher the estate’s value, the higher the tax rate. The estate tax currently applies to any estate worth more than $4.98 million.

Virginia Estate Tax Rates

Virginia does not currently impose an estate tax, making it a more favorable option for estate planning compared to Maryland and Washington DC.

CONCLUSION – ESTATE TAXES

Virginia is the clear winner here!

Key Takeaways

Where you live is very personal. I don’t know that there is enough variance in the above analysis to make someone want to live in one area over another. I believe most people choose a place to buy a home based on community, commute, school district, family, and other more personal reasons.

Virginia stands out as having a lower corporate tax rate, while also not imposing an estate tax.

Maryland and Washington DC, on the other hand, have varying tax rates that may impact your financial decisions.

Think things through carefully to determine the best strategy for your specific situation.

In conclusion, exploring the tax rates in Maryland, Washington DC, and Virginia reveals the diverse fiscal landscapes that shape each area. By recognizing the variations in tax policies and rates, individuals and organizations can better navigate the financial implications of residing or operating a business in these regions.

Tax rates can change at any time. Talk to a financial professional as needed to help you decide. And always talk to an experienced mortgage loan officer who will help you understand your mortgage options, once you decide where you want to live!

Tags: income taxes, property taxes, sales taxes

This entry was posted on Saturday, December 21st, 2024 at 10:58 pm and is filed under Home Buying Process, mortgage, tax breaks. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.