Maryland Transfer Tax and Recordation Tax: County-by-County Guide for Investors

Maryland has some of the highest combined transfer and recordation taxes in the country — and unlike most states where these are fairly uniform, Maryland's system stacks state taxes on top of wildly varying county taxes that can differ by two percentage points depending on which side of a county line your property falls on. If you're running acquisition numbers using a flat 2% for taxes and fees, you're probably underestimating your closing costs.

Here's a precise breakdown for the counties where most investment activity concentrates.

How Maryland's Tax Structure Works

Maryland imposes two separate deed-recording taxes:

1. State Transfer Tax: 0.5% of the purchase price, paid by the seller (but negotiable — in many contracts, it's split)
2. County Transfer Tax: Varies by county, typically split between buyer and seller
3. State Recordation Tax: Separate from transfer tax — charged per $500 of consideration, with county supplements

For investors specifically: Maryland provides no first-time buyer exemption from state transfer tax. The 0.25% first-time buyer discount applies only to owner-occupants. You pay the full rate.

Attorney requirement: Maryland is an attorney state under Real Property § 7-113. A licensed Maryland attorney must supervise settlement. Budget $500-$1,200 for attorney fees as a separate line item.

Montgomery County Recordation Tax

Montgomery County uses a tiered recordation tax that escalates with purchase price — one of the more complex structures in the state.

How the tiering works: The rate applies to the entire purchase price at the applicable tier — it's not marginal. A $520,000 investment property pays 1.35% on the full $520,000, not just the portion above $500,000.

Example: $550,000 investment property in Montgomery County

• State transfer tax (0.5%): $2,750
• Montgomery County recordation tax (1.35%): $7,425
• Montgomery County transfer tax: varies by transaction, typically around 1.0%
• Total deed taxes: approximately $16,000–$18,000 before attorney and title

For properties over $1M in Montgomery County, the recordation tax alone at 2.27% on the full purchase price means you're looking at $22,700+ just on that line item, plus the state transfer tax and any county transfer tax supplement.

This escalation matters when comparing acquisition targets. A $499,000 purchase in Montgomery County pays recordation tax at 0.89%; a $501,000 purchase pays 1.35% on the entire amount. The $2,000 price difference produces an $18,480 difference in recordation tax. Real brokers know this, and listings sometimes cluster just below $500,000.

Prince George's County Transfer Tax

PG County has a combined deed tax of 2.45% — one of the highest in the state for investment property. More importantly, PG County has a provision that no other Maryland county imposes:

Mortgage/deed of trust tax: PG County taxes security instruments (mortgages) at 1.4% of the loan amount.

This is double taxation on the financing itself. If you're financing a $400,000 acquisition with a $300,000 mortgage, you pay:

• PG County deed taxes on purchase price: $9,800
• PG County mortgage tax on loan: $4,200
• State transfer tax: $2,000
• Total before title and attorney: approximately $16,000

For cash buyers, the mortgage tax disappears — which means PG County strongly favors all-cash acquisitions from a tax-efficiency standpoint. Investors refinancing a PG County property also pay the 1.4% again on the new mortgage amount.

PG County breakdown:

• County transfer tax: 1.4% (buyer typically pays half)
• County recordation tax: approximately 1.05% (varies slightly)
• State transfer tax: 0.5%

The cap rates in PG County — 6.5% to 7.0% based on median $420,000 properties renting at $2,300-$2,800 — are attractive relative to DC's 3.5-5% range. But closing cost assumptions need to include that mortgage tax if you're financing.

Baltimore City Transfer Taxes

Baltimore City has the highest combined deed tax rate in Maryland:

• Up to $1,000,000: 3.0% total deed tax
• Over $1,000,000: 3.75% total deed tax

This 3.0% is the combined state + city rate. On a $175,000 Baltimore rowhouse, that's $5,250 in deed taxes — significant relative to the purchase price, but still manageable given the rental income profile ($1,600-$2,000/month for rehabbed units).

Baltimore also charges a special benefits assessment in some neighborhoods. Always get a complete municipal lien search before closing.

Other Counties: Quick Reference

These are approximations — the exact split between recordation and transfer tax varies, and the state's 0.5% is included. Always get a Good Faith Estimate from your title company specific to the county and purchase price.

The 30-45 Day Closing Window

Maryland's closing timeline runs 30-45 days — slightly longer than the national average. This factors into your earnest money risk exposure window. EMD in Maryland is typically 1% of purchase price, or $1,000-$2,500 flat for properties under $200,000.

Investors using 1031 exchange proceeds need to be particularly careful about the non-resident withholding rules: Maryland withholds 8% (individuals) or 8.25% (entities) from proceeds for non-resident sellers. If you're a non-resident investor who bought in Maryland and is now selling, file Form MW506AE at least 21 days before settlement to claim a 1031 exchange exemption and avoid that withholding.

What This Means for Your Acquisition Model

If you're building a Maryland rental portfolio and running county-agnostic closing cost assumptions, here's a rough correction:

• Baltimore City: Budget 4.5-5.5% of purchase price for all closing costs (deed taxes + title + attorney + inspection)
• PG County with financing: Budget 5.5-6.5% (mortgage tax adds a full point)
• Montgomery County $500K+: Budget 5.0-6.0% (tiered recordation jumps sharply)
• Other counties: Budget 3.5-4.5%

These are investors' all-in acquisition cost estimates, not owner-occupant estimates. Factor them into your cap rate calculations before you go under contract.

For a complete map of Maryland's investment property landscape — from county tax structures to ground rent, rental licensing, and capital gains treatment — the Maryland Investment Property Guide walks through every cost layer in one place.

See more Maryland guides →