What are Transfer
Transfer and Recordation taxes are taxes collected by the State of
Maryland and the local jurisdictions upon recording of deeds and
mortgages/deeds of trusts in the land records. Basically, it is sales tax on real
estate. Unfortunately, Maryland does have substantial tax rates. On all
purchases, there are three separate potential taxes to be paid in order
to record a deed. Transfer and recordation tax rates vary by county.
See our rate chart for particular county rates.
See our calculator to calculate transfer tax rates.
and Recordation Taxes?
1) State Transfer TaxThis tax is uniform throughout the entire State. 1/2% of the purchase price. Note that there is an exemption for First Time Maryland Homebuyers. This tax only applies to deeds and is not applicable to mortgages.
2) County/City Transfer TaxesThis tax varies by county and is also based on the purchase price. The sale price times the tax rate equals the amount due.This tax only applies to deeds and is not applicable to mortgages except in certain circumstances in Prince Georges County.
3) Recordation TaxThis tax also varies by county and is also based on the purchase price. The sale price times the tax rate equals the amount due.
Recordation tax can also be due on a mortgage. In a purchase situation, the tax is computed as the tax rate times the loan amount. There is a purchase money exemption to the extent that the deed is already simultaneously being taxed on the same funds. In a refinance situation, there is a refinance exemption on this tax up to the amount of money being paid off.
Who pays the transfer and recordation taxes?Normally a Maryland contract provides who is responsible for the payment of transfer and recordation taxes. If the contract is silent, Maryland law states the presumption is that the buyer and seller shall split the taxes provided the buyer does not qualify as a First Time Maryland Homebuyer. If the contract is silent, and the buyer is a First Time Maryland Homebuyer, Maryland law states the presumption is that the seller shall pay all the taxes.
In Maryland, on an existing home resale, it is customary for the contract to provide for the transfer and recordation taxes to be split evenly between the buyer and seller. Conversely, on the sale of a new home from a builder, it is customary (but not required) for the buyer to pay all of the transfer and recordation taxes (subject to the "First Time Maryland Homebuyers" exemption).