Maryland State Transfer, County Transfer and Recordation Taxes: The First-Time Buyer Exemption
Updated October 2026
Maryland settlement taxes have three separate layers, and first-time buyer relief does not automatically remove all three. To estimate cash accurately, identify the state transfer tax, the county transfer tax, and the recordation tax as individual line items before applying exemptions or dividing costs between buyer and seller.
Start with the state first-time buyer benefit
The ordinary Maryland state transfer-tax rate is 0.50%. For a qualifying purchase by a certified Maryland first-time homebuyer, the state rate falls to 0.25%, and that reduced state tax is paid entirely by the seller.
On a $400,000 transaction, the ordinary state calculation is $2,000. The qualifying first-time calculation is $1,000, paid by the seller. This is not the same as declaring the entire transfer free of tax, and it does not establish who pays every county charge.
Eligibility requires the applicable certification and ownership conditions. If multiple buyers are taking title, have the settlement company confirm how the requirements apply to the entire ownership arrangement before relying on the reduction.
Calculate county charges separately
| Tax layer | Calculation framework | What needs checking |
|---|---|---|
| State transfer | Generally 0.50%; qualifying first-time rate 0.25% | Certification and seller payment |
| County transfer | Often 0.5%–1.5%, where imposed | Jurisdiction, thresholds, and local relief |
| Recordation | County rate expressed per $500 | Taxable base, rounding, exemptions, and credits |
County transfer taxes are not uniform statewide, and some jurisdictions do not impose that tax. Recordation treatment can also differ between purchases and refinances. Avoid applying one county’s rate to a property across the jurisdiction line.
The contract’s allocation of costs matters alongside the statutory rules. Ask for a written worksheet showing the taxable amount, rate, exemption, and payer for each charge. Use the closing cost estimator to organize the comparison.
Keep settlement taxes separate from ownership taxes
Transfer and recordation taxes arise from the transaction. Annual property taxes, escrow deposits, and prepaid tax adjustments are different costs. Review the SDAT and Homestead guide before estimating ongoing ownership expenses.
The Maryland Department of Assessments and Taxation (SDAT) provides property assessment and ownership resources. The Consumer Financial Protection Bureau explains where taxes and other settlement charges appear on mortgage disclosures. Compare the final Closing Disclosure with the earlier estimate, paying particular attention to changed exemptions and buyer-versus-seller allocations.
Compare Current Mortgage Rates
Compare current APRs, points, fees, and estimated monthly payments from participating lenders below.
Loan Program Comparison: 2026 Benchmarks
Maryland State Transfer, County Transfer and Recordation Taxes: The First Time Buyer Exemption — Compare IHCDA First Place 6.0% FHA assistance and Next Home 2.5%–3.5% in Indiana with MSHDA up to $10,000 in Michigan; verify eligibility and repayment or forgiveness terms.
Historical 2025 one-unit comparison: conforming $806,500; FHA floor $524,225. County and unit-count limits can differ.
| Loan program | Down payment / equity | 2026 one-unit baseline | Costs and page-specific comparison |
|---|---|---|---|
| Conventional | 3%–5% subject to eligibility | $832,750 | PMI generally below 20% down |
| FHA | 3.5% at 580+; 10% at 500–579 | $541,287 floor | 1.75% upfront MIP; 0.55% annual for >95% LTV, base loan ≤$726,200, term >15 years |
| VA | 0% for eligible borrowers | No VA limit with full entitlement | No monthly PMI; funding fee unless exempt |
| USDA | 0% for eligible borrowers | Income, address and repayment eligibility | Guarantee and annual fees; confirm current schedule |
| Jumbo | Lender-specific cash and reserves | Above applicable conforming limit | Lender-specific pricing and insurance |
| Home Equity / Refinance | Equity and underwriting dependent | Property and lender dependent | Compare closing costs, term and break-even |
Sources: FHFA limits; HUD FHA limits.
Editorial Methodology & Primary Sources
Verification date: Not recorded; check the primary source and lender timestamp before relying on an estimate.
Rate comparisons use participating lender feeds, not a whole-market survey or guaranteed offers. Freddie Mac PMMS is a market benchmark, not a personalized quote. Calculator models rely on published regulatory formulas and disclosed assumptions rather than fabricated first-person loan testing.
Monthly principal and interest use the amortization formula P × r / (1 − (1 + r)−n), where r is the monthly note rate and n is the number of payments; at zero interest use P / n. PITI adds monthly property taxes and homeowners insurance; PMI is separate. APR includes applicable finance charges under Regulation Z and is not the note rate used for payments. Compare lender Loan Estimates for actual APR and fees.
- Consumer Financial Protection Bureau (CFPB) — Loan Estimates, APR and borrower disclosures; Regulation Z.
- U.S. Department of Housing and Urban Development (HUD / FHA) — FHA program guidance.
- U.S. Department of Veterans Affairs (VA) — VA loan eligibility and benefits.
- Freddie Mac Primary Mortgage Market Survey (PMMS) — published rate benchmarks.
- U.S. Census state tax collections — state property tax benchmarks; confirm parcel-specific assessments and exemptions with the state revenue department and local assessor.
The payment snapshot uses illustrative annual taxes of 1% of home price, $1,200 insurance and 0.5% PMI below 20% down, not verified local quotes. Other calculators disclose their inputs and assumptions. Published guidance and lender feeds may change independently; confirm current program rules, taxes and offers before a decision.