## Facts

- Trustees Philip and Sophia Macht owned in fee 11–13 East Fayette Street in Baltimore City, improved by a building about 100 feet tall.
- A neighboring developer sought to secure unimpeded light and air for a planned office building and entered a long-term agreement with the Machts’ predecessor.
- The agreement leased the airspace above 124 feet over the parcel for 98 years and 9 months beginning April 1, 1961, without renewal.
- Rent was tied to twice the annual real estate taxes on the entire property, with minimum and maximum amounts for certain years and adjustments for improvements.
- The lease included purchase provisions, including an end-of-term option to buy the airspace and, under specified conditions, an obligation to purchase broader interests (fee and improvements), each with inflation adjustments.
- Baltimore City’s assessing authority treated the leased airspace as a distinct assessable interest in real property and increased the assessment to reflect that value.
- The property owners challenged the assessment; the Board of Municipal and Zoning Appeals and the Maryland Tax Court upheld it.

## Issues

1. Whether, under Maryland real property tax law, airspace above a specified elevation that is severed and leased separately from the underlying fee may be treated as a distinct interest in real property subject to separate assessment and taxation.

## Decision

- The Court of Appeals of Maryland affirmed the Maryland Tax Court.
- The court held that the leased superjacent airspace, as severed and commercially valuable, constituted a taxable real property interest that could be separately assessed.
- The court rejected the view that separate assessment was barred merely because the interest concerned airspace rather than the surface estate.

## Legal Principles

- Ownership of airspace is limited to the extent the landowner can reasonably occupy or use it in connection with the land; the traditional ad coelum maxim is not absolute.
- Real property is understood as a bundle of rights; when a component right (such as defined air rights) is severed and transferred by a durable conveyance (e.g., a long-term lease), it can constitute a real property interest.
- Maryland’s property tax statutes permit assessment of partial estates or interests in land when they are capable of separate valuation; severed air rights can fall within “real property” for assessment purposes.
- Separate assessment of a severed airspace interest does not necessarily constitute impermissible double taxation because the taxable rights have been divided into distinct interests.

## Conclusion

Maryland allowed separate real estate tax assessment of defined airspace that was severed from the fee and leased as a valuable, independently alienable interest, and it upheld Baltimore City’s assessment of the airspace leasehold.


Macht v. Dep’t of Assessments of Balt. City, 266 Md. 602, 296 A.2d 162 (Md. 1972)