Maryland imposes both a state transfer tax and county-level recordation taxes, making it one of the more complex closing cost states on the East Coast. Rates vary meaningfully by county — Montgomery County and Prince George's County (the DC suburbs) have different rates from rural counties. Most of Maryland's transfer costs fall on the buyer.
Maryland's "recordation tax" is effectively a transfer tax — do not confuse it with the county recorder's deed recording fee (a separate, much smaller charge).
First-time homebuyers are exempt from the state transfer tax entirely (0.5% savings) AND pay only $1.00/$500 on recordation tax rather than the full county rate.
Montgomery County's combined recordation + transfer taxes can exceed 2% for buyers — among the highest in suburban DC.
The county transfer tax in some counties is split buyer/seller; in others it falls entirely on one party. Always verify with your settlement company.
Both are taxes on real estate transfers. The recordation tax is technically a tax on recording the deed and is paid to the state and county. The transfer tax is imposed on the transfer itself. In practice, both are paid at settlement. The recordation tax is typically larger and varies more by county.
Yes — significant ones. First-time Maryland homebuyers who will use the property as their primary residence are exempt from the state transfer tax (0.5%) and pay a reduced recordation tax rate. These exemptions can save $3,000–$8,000+ on a typical transaction.
Montgomery County (Bethesda, Rockville, Silver Spring) has the highest recordation tax rate at $5.05 per $500 (1.01%), plus the state transfer tax and a county transfer tax. Combined buyer costs in Montgomery County can exceed 2% of the purchase price.
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