Maryland Recordation Tax Calculator and County Rates: Exemptions

Maryland recordation tax rates vary by county, ranging from roughly $3.50 to $5.00 per $500 of consideration, with several jurisdictions adding surcharges on higher-value transactions. The tax is imposed under Title 12 of the Tax-Property Article and applies whenever a deed, mortgage, deed of trust, or other instrument is recorded in the land records. Because each county and Baltimore City sets its own rate, the tax on an identical purchase price can differ by thousands of dollars depending on where the property sits.

How the Tax Is Calculated

Recordation tax is computed on the “consideration” for the transaction, measured in $500 increments. Divide the consideration by $500, then multiply by your county’s rate. Any fraction of a $500 increment counts as a full increment, so consideration of $300,250 is taxed on 601 increments rather than 600.

Consideration is broader than the cash price. Under Tax-Property §12-103, it includes any mortgage or deed of trust the buyer assumes, the value of other property exchanged, and any other economic benefit flowing to the seller. Buy a property for $250,000 cash and assume an existing $50,000 mortgage, and the consideration is $300,000.1Maryland General Assembly. Maryland Code Tax-Property Section 12-103 – Rate of Tax

For a mortgage or deed of trust, the tax is calculated on the principal amount of debt secured, regardless of the property’s sale price. A $400,000 loan is taxed on $400,000. When the full amount of secured debt has not yet been incurred at recording, tax applies only to the principal actually incurred, with additional tax due within seven days after any additional debt is incurred.

County Rates

State law authorizes the tax; each county and Baltimore City sets the rate.2Maryland General Assembly. Maryland Code Tax-Property 12-103 Representative rates:

Some jurisdictions layer on surcharges. Montgomery County adds a surcharge on transactions exceeding $600,000, and Anne Arundel County adds a 0.5% transfer tax surcharge on transactions of $1 million or more.3Maryland Department of Legislative Services. Local Real Property Tax Rates in Maryland A statewide $40 surcharge also applies to most recorded instruments.6Maryland Courts. Recording Fees and Taxes Check with the county finance office where the property is located to confirm the current rate and any surcharge threshold before closing.

How Recordation Tax Differs From the State Transfer Tax

The state transfer tax is a flat 0.5% of consideration under Title 13 of the Tax-Property Article, and it does not apply to security instruments like mortgages or deeds of trust. Recordation tax does apply to security instruments and is set locally. On a typical home purchase, both taxes hit the deed, but only recordation tax hits the loan instrument. The rates and exemptions discussed here concern only the recordation tax.

Who Pays

Under Real Property §14-104, the buyer and seller split the recordation tax equally by default, unless the purchase agreement says otherwise.7Maryland General Assembly. Maryland Code Real Property 14-104 – Recordation and Transfer Taxes

There is one significant exception. When a first-time Maryland homebuyer purchases improved residential property to use as a principal residence, the seller pays the entire recordation tax and local transfer tax. The parties can override this only with an express written agreement.7Maryland General Assembly. Maryland Code Real Property 14-104 – Recordation and Transfer Taxes A “first-time Maryland home buyer” is someone who has never owned residential property in Maryland used as a principal residence.

The split rule does not apply to mortgages or deeds of trust. The borrower typically pays the recordation tax on the loan instrument, since the borrower is the one recording a new lien.

Exemptions That Reduce or Eliminate the Tax

Tax-Property §12-108 lists numerous exemptions. A few come up often enough to matter for most buyers and homeowners.

Refinancing: The New Money Rule

A new mortgage or deed of trust is not subject to recordation tax to the extent it refinances the unpaid principal balance of an existing mortgage. Only the “new money” above the existing balance is taxed.8Maryland General Assembly. Maryland Code Tax-Property 12-108 Owe $200,000 on your current mortgage and refinance into a new $250,000 loan, and recordation tax is due only on the $50,000 increase. The original mortgagor must be the person refinancing for the exemption to apply. Adding a spouse to the new loan is fine as long as the original borrower remains on it. The same logic covers supplemental instruments that increase principal on an existing loan; tax applies only to the increase.

Transfers Between Spouses and Family

A deed transferring property between spouses or former spouses is fully exempt, as are transfers between domestic partners and former domestic partners. When property is transferred subject to an existing mortgage, the recordation tax does not apply to the assumed debt if the transfer is between close family members. The statute covers children, stepchildren, parents, stepparents, in-laws, siblings, stepsiblings, grandchildren, and grandparents.9Maryland General Assembly. Maryland Code Tax-Property Section 12-108

Principal Residence and First-Time Homebuyer Exemptions

Counties may exempt a specified amount of consideration when the buyer intends to use the property as their principal residence, meaning actual occupancy for at least seven months out of a twelve-month period.1Maryland General Assembly. Maryland Code Tax-Property Section 12-103 – Rate of Tax A county may also fully exempt first-time homebuyers who file a sworn statement that they have never owned residential property in Maryland used as a principal residence. Not every county has adopted these exemptions and amounts vary, so confirm with the county finance office.

Estate and Government Transfers

Deeds transferring real property from a decedent’s estate are exempt under §12-108(dd), in conjunction with the Estates and Trusts Article. Instruments transferring property to or granting a security interest to the United States, the State of Maryland, any state agency, or a political subdivision are also exempt.9Maryland General Assembly. Maryland Code Tax-Property Section 12-108

Conservation Land Trusts

A deed to a land trust is exempt if the trust files a declaration of intent that the land will be used to preserve a natural area, for public environmental education, to conserve agricultural land, or to maintain a wildlife sanctuary.9Maryland General Assembly. Maryland Code Tax-Property Section 12-108

Paying the Tax at Recording

Every recorded instrument must be accompanied by a completed State of Maryland Land Instrument Intake Sheet (Form AOC-CC-300), which has dedicated sections for calculating both the recordation tax and the transfer tax. The original deed plus a photocopy go in together.10Maryland Courts. State of Maryland Land Instrument Intake Sheet

Payment is usually made by separate checks: one for the recordation tax payable to the county’s director of finance or equivalent office, and another for the state transfer tax and recording fees payable to the clerk of the court. Accepted payment methods vary by jurisdiction, so confirm before closing day. When a nonresident seller is involved, additional withholding documents are required.11Library of Maryland Regulations. Code of Maryland Regulations 03.04.12.06 – Additional Requirements for Recordation or Filing

The clerk will not record an instrument until the correct tax is paid, which effectively makes recordation tax due at the moment of recording. Understate consideration or miscalculate the tax and the instrument simply is not recorded, which leaves title and lien priority unsettled. Interest accrues on any unpaid tax from the date it was due until it is paid.12Maryland Comptroller of Maryland. Administrative Release No. 14 – Interest Rates for Refunds and Delinquent Taxes