By Alltech National Title — Northern Virginia & Maryland Practice Published: 2026-05-07 · 7-min read
Key Takeaways
- Maryland imposes both a state transfer tax (0.5% of the sale price) and a county transfer tax (rate varies by county) — both apply to most residential purchases.
- First-time homebuyers in Maryland may qualify for a transfer tax exemption — confirm eligibility early and document it at closing.
- The TRID Closing Disclosure must accurately reflect transfer tax allocations — errors here can trigger cure obligations and delay closing.
- Transfer tax rates in Maryland’s Montgomery, Prince George’s, and Anne Arundel counties differ; your title company will calculate the exact split in your net sheet.
Maryland has the most complex transfer tax structure in the DMV — and arguably one of the most complex in the Mid-Atlantic region. Unlike Virginia, where transfer and recordation taxes follow a largely uniform statewide structure with modest local add-ons, Maryland imposes a state transfer tax, a state recordation tax, and county-level transfer taxes that vary materially from county to county. First-time Maryland homebuyer exemptions apply to both the state and some county taxes, adding another variable. For lenders preparing Loan Estimates, for agents advising buyers on closing costs, and for settlement attorneys preparing Closing Disclosures, getting Maryland transfer taxes right requires knowing the exact county, knowing the buyer’s purchase history, and knowing how Maryland’s rules interact with TRID line item categories.
The Maryland Transfer Tax Structure: Three Layers
A Maryland real estate transaction involving a deed conveyance generates up to three layers of transfer-related taxes:
1. State Transfer Tax — imposed by the State of Maryland on the grantor (seller). The rate is 0.5% of the consideration. On a $600,000 sale, the state transfer tax is $3,000. By statute and customary practice on Maryland residential transactions, the state transfer tax is split equally between buyer and seller — each pays 0.25% — though this is negotiable in the contract.
2. State Recordation Tax — imposed on the recording of instruments (deed and deed of trust). The state recordation tax on the deed is $4.95 per $500 of consideration (0.99%) for most Maryland counties. The state recordation tax on the deed of trust (the mortgage tax) is the same rate applied to the loan amount. On a $500,000 loan, the state recordation tax on the deed of trust is $4,950.
3. County Transfer Tax — imposed by the county where the property is located. Rates vary significantly by county and are paid by the buyer (or as negotiated). County transfer taxes are separate from state taxes and are calculated on the purchase price.
County-by-County Transfer Tax Rates
The following are the county transfer tax rates for the Maryland counties most relevant to DMV practitioners. All rates apply to the consideration (purchase price) unless noted.
Montgomery County: 1.0% for first-time Maryland homebuyers; graduated rates up to 1.4% for non-first-time buyers on transactions above $500,000. Montgomery County has the most complex county transfer tax structure in the DMV market — lenders preparing Loan Estimates for Montgomery County properties must confirm buyer status and purchase price tier before calculating the county transfer tax.
Prince George’s County: 1.4% county transfer tax. No graduated structure — the 1.4% applies uniformly across all purchase price levels and buyer types (first-time buyer exemption from state tax still applies; the county tax is not waived).
Howard County: 1.0% county transfer tax. Howard County is one of the wealthier jurisdictions in the Baltimore metro area; its transfer tax rate is moderate relative to the purchase prices typical in the county.
Frederick County: 0.5% county transfer tax. Frederick County has the lowest county transfer tax rate among the Maryland counties most commonly served from Northern Virginia. Combined with the state taxes, total transfer costs in Frederick County are materially lower than in Montgomery or Prince George’s on a same-price transaction.
Anne Arundel County: 1.0% county transfer tax.
Baltimore City: 1.5% city transfer tax — the highest in the Maryland market. Baltimore City also has unique title considerations around ground rent properties.
Baltimore County: 1.5% county transfer tax.
Charles County: 0.5% county transfer tax.
St. Mary’s County: 0.5% county transfer tax.
First-Time Maryland Homebuyer Exemptions
Maryland Code § 13-207 of the Tax-Property Article provides that first-time Maryland homebuyers are exempt from the state transfer tax on their purchase transaction. “First-time Maryland homebuyer” is defined as a person who has not owned residential real property in Maryland that was used as a principal residence at any time during the three years immediately before the current purchase.
The exemption applies to the state transfer tax (0.5%, or 0.25% of each party’s share). On a $600,000 purchase, the state transfer tax exemption saves the first-time buyer $1,500 (their 0.25% share). The seller still pays their share of the state transfer tax even if the buyer qualifies for the exemption.
Some Maryland counties also offer first-time buyer exemptions or reduced rates on the county transfer tax. Montgomery County’s graduated rate structure provides a lower rate for first-time buyers. Frederick County, Charles County, and some other counties provide full or partial county transfer tax exemptions for first-time buyers — these vary and should be confirmed for each county.
For lenders: when a buyer is a first-time Maryland homebuyer, the state transfer tax line on the Loan Estimate should reflect the exemption. Failing to apply the exemption at LE preparation overstates the buyer’s closing costs; correcting it upward on the CD creates tolerance pressure on the transfer tax line. Confirming first-time buyer status at LE preparation is the correct workflow.
Deed of Trust Recordation Tax: What Lenders Pay
In Maryland, the deed of trust recordation tax (sometimes called the mortgage tax) is imposed on the recording of the deed of trust, calculated on the face amount of the loan. The rate is $4.95 per $500 (0.99%) statewide.
On a refinance with a new deed of trust, the full state recordation tax applies on the new loan amount. On a purchase transaction, the deed of trust recordation tax is paid by the buyer/borrower in addition to the deed transfer taxes.
Some Maryland counties also impose a county recordation tax on deeds of trust in addition to the state rate. Practitioners should confirm county-specific recordation tax rates when calculating total recording-related costs on a Maryland deed of trust.
For TRID purposes, the deed of trust recordation tax is classified differently from the deed transfer taxes — it typically appears in Section B or C of the Closing Disclosure (lender-required fees), while the deed transfer taxes appear in Section E (taxes and other government fees). Misclassifying these on the CD creates TRID compliance issues and may require cure or correction.
Practical TRID Implications
Maryland’s transfer tax complexity creates several recurring TRID accuracy problems for lenders who don’t specialize in Maryland origination:
Applying Virginia rates to Maryland properties. LOS systems that default to “Northern Virginia” rates for any DMV-area property will systematically underestimate Maryland transfer taxes — sometimes by thousands of dollars. A $600,000 purchase in Montgomery County generates roughly $12,000+ in combined state and county transfer taxes for a non-first-time buyer; a comparable Northern Virginia transaction generates roughly $3,000. Using Virginia defaults on a Maryland LE creates a tolerance gap that appears on the CD.
Missing the first-time buyer exemption. Lenders who don’t confirm buyer status at LE preparation issue LEs that overstate transfer costs for qualifying first-time Maryland buyers. While overstating costs doesn’t create a TRID cure obligation, it does create a CD that looks like costs went down — which can confuse borrowers and undermine trust in the lender’s LE accuracy.
Baltimore City transactions. Baltimore City’s 1.5% city transfer tax, combined with the state transfer tax and state recordation tax, produces total transfer costs that are among the highest in the region. LEs for Baltimore City properties that use any other Maryland county’s rates will be materially off.
The correct workflow: when opening a Maryland file, confirm the county, confirm first-time buyer status, and calculate transfer taxes using county-specific rates before issuing the LE. Our Maryland settlement team can provide transfer tax estimates for any Maryland county on request — reach us at (703) 934-2100 or info@alltechnational.com before issuing the LE, not after.
ATG Title is Alltech National Title’s DMV operating brand, serving Northern Virginia, Maryland, and the District of Columbia from offices in Haymarket and Fredericksburg, Virginia.
