All-items parity
105.0
US = 100.0
Maryland (MD) | All-items parity 105.0
Maryland Cost of Living 2026
Maryland reads 105.0 on the BEA all-items price parity for 2024, with housing rents at 121.1 driven by the Washington DC commuter counties. The compensation is income: at $102,905, Maryland's median household income ranks among the very highest in the nation, anchored by federal employment and contracting. The tax quirk to know before moving: every Maryland county levies its own income tax on top of the state's 2 to 6.5% brackets, and Maryland is the only state with both an estate tax and an inheritance tax.
Top-tier median incomeCounty income tax on topDC commuter premium
Median Home
$436,300
2BR rent $1,758/mo
Median Income
$102,905
Household, Census ACS
Category breakdown
The four BEA price parities vs the nation
| Category | MD index | National avg | Difference |
|---|---|---|---|
| All items | 105.0 | 100.0 | 5.0% |
| Services: housing rents | 121.1 | 100.6 | 20.4% |
| Goods | 102.5 | 99.6 | 2.9% |
| Services: utilities | 110.9 | 98.4 | 12.7% |
| Services: other | 101.6 | 100.1 | 1.5% |
U.S. Bureau of Economic Analysis publishes these four component parities and no others. There is no federal grocery, healthcare or transportation price parity, so this table shows none. Food at home sits inside Goods; medical and transport services sit inside Services: other.
Sources: BEA Regional Price Parities by State (table SARPP), 2024 reference year, U.S. Bureau of Economic Analysis. Census ACS 2024 1-year (median income, home value), Comptroller of Maryland (state and county income tax), Tax Foundation (effective property tax), EIA (electricity rates), KFF (uninsured rate).
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Pros / offsets
What works in Maryland.
Incomes near the top of the nation. The $102,905 median household income reflects federal agencies, defense contracting, NIH and Johns Hopkins; Howard and Montgomery counties routinely rank among America's highest-income counties. Prices are high, but the price-to-income ratio is healthier than the coastal norm.
Federal-anchored job stability. The DC-adjacent economy is unusually recession-resistant: government, biotech along the I-270 corridor, cybersecurity around Fort Meade and the NSA. Dual-earner professional households have depth of employers that few metros outside the Acela corridor match.
Baltimore is the discount door in. A major-amenity city with row homes commonly under $250,000, a third below the state median, and MARC rail into DC for commuters. The value gap between Baltimore and the DC suburbs is one of the widest short-distance arbitrages on the East Coast.
Retiree carve-outs soften the tax bite. Social Security is exempt from Maryland income tax, and residents 65+ get a meaningful pension exclusion. For working-age high earners the tax load is heavy; for typical retirees it is considerably lighter than the headline rates suggest.
Cons / drivers
Where Maryland costs more.
The county income tax is the hidden bracket. Maryland's 2 to 6.5% state brackets are only half the bill: every county (and Baltimore City) levies a mandatory local income tax, generally between about 2.25% and 3.2%. A Montgomery County professional faces a combined state-plus-local rate near 8%, Virginia-plus territory without the headline admitting it.
DC-suburb housing prices. Housing parity of 121.1 reflects Montgomery, Howard and Anne Arundel counties, where ordinary single-family homes commonly run $550,000 to $800,000. The $436,300 statewide median already includes cheap Baltimore and the rural Shore pulling it down.
The only state with both death taxes. Maryland levies an estate tax (above a multi-million exemption) and an inheritance tax on certain non-lineal heirs, the only state with both. Close relatives are exempt from the inheritance tax, but estate planning is genuinely more complicated here.
Everyday costs track the Acela corridor. Groceries at $419 a month, utilities parity 110.9, childcare in the DC suburbs at near-coastal rates, and toll corridors (the ICC, Bay Bridge, I-95 express lanes) all price like the Northeast, because economically Maryland is the Northeast.
Tax + benefit signals
Maryland tax and access overview
State income tax
2-6.5%
Graduated or flat
Property tax effective
0.99%
Of assessed value, annual
Sales tax (state)
6.00%
Local can add 1-4% more
Uninsured rate
6.0%
Medicaid: expanded
Your take-home pay in Maryland
Federal, Maryland and any local income tax on your salary, per paycheck.
The mortgage on a $436,300 home
Monthly payment at today’s rates with Maryland property tax (0.99%) and average home insurance.
Metro variation
State averages mask city variation.
Maryland averages 105.0 on the BEA all-items parity across four very different sub-markets:
DC suburbs (Montgomery, Prince George’s, Howard, Anne Arundel): The expensive core. Montgomery and Howard pair top-10 national incomes with $600,000+ family homes; Prince George’s is the relative value play inside the Beltway.
Baltimore metro: City row homes under $250,000 and solid suburbs (Towson, Columbia-adjacent) below DC-suburb prices, with MARC rail making DC salaries reachable.
Eastern Shore: Rural and coastal, far below the state average outside resort towns like Ocean City and gentrifying Easton/St. Michaels.
Western Maryland (Frederick, Hagerstown, Cumberland): Frederick has become the I-270 corridor’s release valve; Hagerstown and Cumberland price like Appalachia, among the cheapest housing in the mid-Atlantic.
The state average is an abstraction here; county choice swings a Maryland budget by thousands a month.
Frequently Asked
Maryland cost of living, answered
How do Maryland's county income taxes work?
Every Maryland county and Baltimore City levies a mandatory local income tax collected on the state return, with rates generally between about 2.25% and 3.2% of taxable income. It stacks directly on the state's 2 to 6.5% brackets, so a high earner in Montgomery County faces a combined marginal rate near 8%. When comparing Maryland against Virginia (no local income tax) or DC, always compare combined rates, not state headline rates.
Is Maryland expensive compared to Virginia for DC workers?
They are close, and the details decide it. Maryland's combined state-plus-county income tax usually exceeds Virginia's 5.75% flat-ish top rate, while Northern Virginia housing (Arlington, Fairfax) generally prices above Montgomery County equivalents. Maryland exempts Social Security; Virginia taxes less aggressively in retirement via its age deduction. For most working households it is a housing-choice decision, not a tax decision; run both sides on the /calculator.
Does Maryland tax Social Security or pensions?
Social Security is fully exempt from Maryland income tax. Residents 65 and over may also exclude a substantial amount of pension and qualified retirement income under the state's pension exclusion. The counties tax what the state taxes, so these exemptions flow through to the local tax too. Maryland is tougher on wage earners than on typical retirees, though its estate and inheritance taxes are the other side of that ledger.
What is the deal with Maryland having two death taxes?
Maryland is the only state that levies both an estate tax and an inheritance tax. The estate tax applies above a multi-million-dollar exemption; the 10% inheritance tax applies to bequests to non-exempt heirs, though spouses, children, grandchildren, parents and siblings are exempt. In practice most family estates pay neither, but unmarried partners and bequests to friends, nieces or nephews can be caught, which makes Maryland estate planning unusually consequential.
Is Baltimore really that much cheaper than the DC suburbs?
Yes, it is one of the East Coast's starkest short-distance gaps. Baltimore City row homes commonly sell under $250,000 while a comparable Montgomery County single-family home runs $600,000+, 40 minutes away. Baltimore City layers its own 3.2% local income tax and higher property-tax rate, and neighborhood selection matters more than in the suburbs, but for a DC salary via MARC rail the housing arbitrage is unmatched in the region.
How do Maryland groceries and utilities compare?
BEA publishes no grocery parity; food sits inside the goods parity, 102.5 for Maryland against a national 99.6, and Maryland exempts unprepared groceries from its 6% sales tax. Household grocery spending averages $419 a month. Utilities price at 110.9 on the parity, with electricity at 15.25 cents per kWh and an average bill of $152, mid-Atlantic normal rather than New England painful.