Maryland buyers may encounter three separate deed-related charges at closing: state transfer tax, county transfer tax, and recordation tax. The property's county, purchase price, first-time buyer status, contract, and available exemptions determine the calculation and who ultimately pays each amount. Your lender and settlement company should verify the final figures before closing.
Why these taxes matter to your homebuying budget
A down payment is only one part of the money needed to buy a home. Maryland deed taxes may appear among the closing charges along with lender fees, title services, prepaid interest, homeowners insurance, property-tax escrows, and other costs. If they are not estimated early, a buyer can underestimate the funds required at settlement.
These charges are not the same as the annual property tax included in a monthly housing payment. Transfer and recordation taxes are generally connected to the deed or instrument being transferred and recorded. Review the broader breakdown in the guide to cash to close versus the down payment.
The three charges Maryland buyers should recognize
1. Maryland state transfer tax
Maryland courts' published recording guidance lists the general state transfer-tax rate as 0.5% of the consideration. For a qualifying first-time Maryland homebuyer purchasing a principal residence, the published rate is 0.25%. Qualification requires the appropriate sworn statement and satisfaction of the statutory requirements.
“First-time” is a legal eligibility question, not merely a description of how a buyer feels about the transaction. Buyers should let the title or settlement professional determine whether the required affidavit and reduced rate apply.
2. County transfer tax
County transfer-tax rates are local. Some Maryland jurisdictions charge a county transfer tax while others do not, and local exemptions can differ. The Maryland Department of Assessments and Taxation directs tax billing and payment questions to the county or Baltimore City office where the property is located.
Howard County's Department of Finance currently lists a county transfer tax rate of 1.25%. That local rate is separate from Maryland's state transfer tax.
3. Recordation tax
Recordation tax is imposed when an eligible instrument is recorded in the land records. Howard County's adopted fiscal-year 2026 rate is $2.50 for each $500, or fraction of $500, of consideration or applicable debt. The precise taxable base and available exemptions depend on the document and transaction.
Because the rule can involve consideration, secured debt, refinancing, assumptions, and exemptions, an online percentage estimate should never replace the settlement professional's calculation.
Worked Howard County example: a $500,000 purchase
Consider a $500,000 Howard County purchase that uses the general rates and assumes no exemption, reduction, special taxable-base adjustment, or contract allocation. The gross calculation would be:
- Maryland state transfer tax at 0.5%: $2,500
- Howard County transfer tax at 1.25%: $6,250
- Howard County recordation tax at $2.50 per $500: $2,500
- Illustrative combined total: $11,250
This does not mean the buyer will necessarily pay $11,250. It shows how the three gross charges can be calculated before determining first-time buyer treatment, exemptions, the taxable base, and responsibility under the purchase contract. It also excludes title, lender, escrow, insurance, recording, and other closing expenses.
How first-time Maryland buyer treatment can change the estimate
Using the same $500,000 illustration, reducing only the Maryland state transfer-tax rate from 0.5% to 0.25% would reduce that component from $2,500 to $1,250. The difference is $1,250.
That calculation should not be treated as a final closing quote. Maryland law also addresses responsibility for recordation and local transfer tax in certain first-time homebuyer transactions, and an express agreement may affect allocation. County-specific benefits may also require separate affidavits. The settlement company should confirm the treatment using the signed contract and current law.
Who pays transfer and recordation taxes?
Do not rely on a general rule of thumb. Responsibility can be affected by Maryland law, local rules, first-time buyer status, builder provisions, and the purchase agreement. The contract may divide a charge, assign it to one party, or reflect a negotiated concession.
Before signing an offer, ask the real estate agent and settlement company for a written estimate showing the buyer's expected share. That estimate can then be incorporated into the mortgage cash-to-close plan.
Can seller credits help?
An eligible seller credit may reduce the buyer's out-of-pocket closing expense, but it must fit the mortgage program and the actual eligible charges. Seller contribution limits vary by program, occupancy, loan-to- value ratio, and property type. The credit also cannot become unrestricted cash back to the buyer.
Estimate the deed taxes before negotiating the offer so the requested credit is supported by real costs. The separate guide to seller-paid closing costs explains program limits, unused credits, and appraisal considerations.
A practical Maryland closing-cost planning process
- Identify the county where the property is located.
- Obtain the current state, county, and recordation-tax rates.
- Tell the settlement company whether any buyer may qualify as a first-time Maryland homebuyer.
- Review the purchase contract to see how the charges are allocated.
- Confirm the taxable base and any applicable affidavit or exemption.
- Add the buyer's estimated share to the full cash-to-close worksheet.
- Update the figures when the property, price, financing, or contract terms change.
Buyers considering Howard County can also review the Howard County mortgage and closing-cost guide. For broader program planning, visit the Maryland mortgage resource page.
Build the closing costs into your plan before you make an offer
Dan Flavin's Path 2 Buy process reviews payment, cash to close, available funds, program options, and offer structure before you commit to a property.
Frequently asked questions
What are Maryland transfer and recordation taxes?
They are separate charges associated with transferring and recording real property. Maryland imposes a state transfer tax, counties may impose a local transfer tax, and the jurisdiction collects recordation tax under its applicable rate and rules.
How much are transfer and recordation taxes in Howard County?
Howard County currently lists a 1.25% county transfer tax and a recordation rate of $2.50 per $500 or fraction of $500. Maryland's state transfer tax is generally 0.5%, subject to applicable first-time buyer and other rules.
Do Maryland first-time homebuyers receive a transfer-tax benefit?
A qualifying first-time Maryland homebuyer purchasing a principal residence may receive a reduced state transfer-tax rate of 0.25%. Affidavits, local rules, contract terms, and other requirements must be reviewed for the specific transaction.
Can a seller credit cover Maryland closing taxes?
An eligible seller credit may be applied toward allowable buyer closing costs. The loan program, contract, appraisal, actual charges, and contribution limits determine how much can be used.
Primary sources
- Howard County Department of Finance: Recordation and County Transfer Tax
- Howard County Council Resolution 112-2025: FY 2026 Recordation Tax Rate
- Maryland Courts: State Transfer-Tax Rates and First-Time Buyer Guidance
- Maryland SDAT: Local Tax Billing and Collection Offices
This article is educational and is not legal, tax, credit, or financial advice. Tax rates, exemptions, contract allocations, loan requirements, and closing figures can change and must be confirmed for the specific transaction. All loans are subject to approval. Equal Housing Lender.