Maryland's Homeowners' Property Tax Credit can reduce a property tax bill when taxes exceed a set percentage of combined gross household income. The Department of Assessments and Taxation (SDAT) states that combined gross household income cannot exceed $60,000, and that the dwelling must be your principal residence.

Net worth generally must be under $200,000 excluding the home and qualified retirement accounts. The credit is not automatic. Apply by October 1 of each year.

Who qualifies, and how the credit is figured

This program is separate from the Homestead Property Tax Credit, which caps taxable assessment increases. The Homeowners' Tax Credit sets a limit on the property tax a qualifying homeowner must pay, based on income. Before income is considered, you must own or have a legal interest in the property; the dwelling must be your principal residence where you live at least six months of the year, including July 1, unless you are a recent purchaser or are unable to do so because of health or need of special care; your net worth, not including the value of that property or qualified retirement savings or Individual Retirement Accounts, must be less than $200,000; and combined gross household income cannot exceed $60,000.

"Income" for this program means combined gross income before deductions. Report income for the homeowner, spouse, and all other household occupants over 18, unless they are dependents or they pay rent or room and board. Income from all sources must be reported, whether or not it is taxable, including nontaxable retirement benefits such as Social Security and Railroad Retirement.

The tax credit is the amount by which the property taxes exceed a percentage of income under this formula, according to SDAT: 0% of the first $8,000 of combined household income; 4% of the next $4,000; 6.5% of the next $4,000; and 9% of all income above $16,000. SDAT's chart shows, for example, that at $16,000 of income the tax limit is $420. If the actual tax bill were $990, the credit would be $570. For each additional $1,000 of income above $30,000, add $90 to $1,680 to find the tax limit, up to the $60,000 income ceiling.

The credit applies only to taxes resulting from the first $300,000 of assessed valuation. It does not cover metropolitan or fixed charges for water and sewer services that may appear on the bill. If you own a large tract, the credit is limited to the lot or curtilage on which the dwelling stands. If part of the dwelling is used for a business, the credit is based only on the portion occupied by your household.

When and how to apply

The deadline is October 1 of each year. SDAT says it is to your advantage to apply by April 15 so that any credit can be deducted from the initial July tax bill. Filings after April 15, through October 1, receive any credit on a revised bill. If you already paid the bill, the local government may issue a refund. Do not delay an early-payment discount while you wait for a late-filed credit.

Apply online, or mail the current year's paper application, including the 2026 form posted on SDAT's site, to State Department of Assessments and Taxation, Homeowners' Tax Credit Program, P.O. Box 49005, Baltimore, MD 21297. Do not email applications or supporting tax returns. Applicants must submit copies of prior-year federal income tax returns and permit SDAT to verify income. Prospective buyers who hope to use the credit at settlement should apply at least 30 days before the expected settlement date and request Form HTC-NP. Questions can go to sdat.homeowners@maryland.gov or 410-767-4433.

Some counties offer a supplemental credit administered through the same SDAT form. SDAT lists Anne Arundel, Baltimore City, Baltimore County, Calvert, Caroline, Carroll, Charles, Frederick, Harford, Howard, Kent, Montgomery, and Washington among counties that offer additional credits. Confirm current local rules with SDAT rather than assuming a supplement is automatic. If you are found ineligible, SDAT informs you in writing and explains how to appeal to the local Property Tax Assessment Appeals Board. Heirs who do not yet hold record title may qualify for up to three taxable years while title is finalized, with the documentation SDAT lists, and a 2026 law addresses continued credits during probate.

This income-based credit can be claimed in addition to a homestead credit when you qualify for both, because they operate in different ways. Ask SDAT or look at a prior bill to see whether both already appear. Keep a copy of the filed application and the federal tax returns you submitted.

FAQ

How is this different from the homestead credit?

The homestead credit caps taxable assessment increases on a principal residence. The Homeowners' Tax Credit is an income-based limit on the tax bill itself, and it requires a new application each year.

What is the income limit?

SDAT states that combined gross household income cannot exceed $60,000, counting income from all sources, including nontaxable Social Security.

When is the application due?

October 1 of each year. Filing by April 15 helps the credit appear on the July bill.

Does the credit cover the entire assessment?

No. It applies only to taxes on the first $300,000 of assessed valuation, and it does not cover certain water, sewer, or metropolitan charges.

Next step

If your household income may be at or under $60,000, complete the current Homeowners' Tax Credit application by April 15 if you can, or by October 1 at the latest, and ask a licensed local real estate agent or SDAT whether a county supplement also applies.

Sources: Maryland Department of Assessments and Taxation, Homeowners' Property Tax Credit Program; 2026 Homeowners' Tax Credit Application.

Maryland's Homestead Property Tax Credit limits the taxable assessment increase on a principal residence to 10% a year for state property tax, and to 10% or less for local tax if the county or municipality sets a lower cap. The credit requires a one-time application with the Department of Assessments and Taxation (SDAT).

It applies to only one property, the owner's principal residence.

How the cap works, and who can receive it

SDAT's homestead page explains that every county and municipality in Maryland must limit taxable assessment increases to 10% or less each year. The credit does not freeze the market value that SDAT determines. It is a credit calculated on any assessment increase that exceeds 10%, or the lower local cap, from one year to the next. The homeowner pays no property tax on the market-value increase above that limit. If the annual assessment increase stays at or below the cap, the credit may not appear on that year's bill, which does not by itself change an approved eligibility status.

SDAT's example assumes an old assessment of $100,000 and a new phased-in assessment of $120,000 in the first year. A 10% increase would be $110,000. The $10,000 difference is the amount on which the credit is calculated. At a tax rate of $1.04 per $100 of assessed value, the credit would be $104.

Conditions include that, during the previous tax year, the property was not transferred to new ownership, there was no homeowner-requested zoning change that increased value, there was no substantial change in use, and the previous assessment was not clearly erroneous. The dwelling must be the owner's principal residence, and the owner must have lived in it for at least six months of the year, including July 1 of the year for which the credit applies, unless temporarily unable to do so because of illness or need of special care. An owner can receive the credit on only one property.

A 2007 law requires a one-time application so that the credit is not granted on vacation homes or rental properties. File online through Maryland One Stop or SDAT's homestead application, or mail or fax the paper form. SDAT's current homestead page lists mail to the Department of Assessments and Taxation, Homestead Tax Credit Division, 700 East Pratt Street, 2nd Floor, Suite 2700, Baltimore, Maryland 21202, and fax 410-225-9344. Check your property on SDAT's Real Property search to see whether the homestead application status is already Approved or Application Received. New purchasers are mailed an application after the deed is recorded, but you may also apply without waiting if the status still shows no application.

A contract for the sale of residential property must include a statement that if you plan to live in the home as your principal residence, you may qualify for the Homestead Property Tax Credit, which may significantly reduce the taxes you owe, and must include the website address https://dat.maryland.gov/homestead. The person conducting settlement must also present the buyer with a copy of the homestead application.

If you vacate the home to raze it or make substantial improvements, you may keep eligibility if you owned and occupied it as a principal residence for at least three full tax years immediately before, and if the replacement or improvements are completed within the next succeeding tax year after the year the work began, as SDAT describes. If a credit is denied, contact the homestead unit; a final denial may be appealed within 30 days to the local Property Tax Assessment Appeals Board.

Local caps can be lower than 10%, and they can differ for the county and for a municipality. SDAT publishes a listing of homestead caps for each local government; use the current table rather than a neighbor's older tax bill. After you buy, check the next tax bill for the credit and, if it is missing, confirm both the application status and whether the annual increase simply stayed under the cap. If you stop using the home as your principal residence, notify the local assessment office so the credit is not left in place on a property that no longer qualifies.

FAQ

Does the homestead credit freeze my assessment?

No. SDAT still determines market value. The credit limits the portion of an assessment increase that is taxable, using a 10% cap for state tax and 10% or a lower local cap for local tax.

How often do I have to apply?

The homestead eligibility application is generally a one-time filing for as long as you remain in that principal residence and remain eligible. Confirm the status on SDAT's Real Property search.

Can I claim the credit on a second home?

No. An owner can receive the credit only on one property, the principal residence, and must have lived there at least six months of the year, including July 1, subject to the illness and special-care exception.

What if I have just bought the home?

A sale contract must point you to the homestead program, and the settlement agent must provide the application. New owners are also mailed an application after the deed is recorded. File if the property record still shows no application.

Next step

Look up the property on SDAT's Real Property search, file the one-time homestead application if no approval is on file, and ask a licensed local real estate agent or the county to confirm the local cap that will apply after you occupy the home.

Sources: Maryland Department of Assessments and Taxation, Homestead Property Tax Credit; SDAT Real Property search; Homestead application (One Stop).

The Maryland Mortgage Program (MMP), administered with the Department of Housing and Community Development, offers down payment assistance with many of its first mortgages. Official 1st Time Advantage products include a $6,000 zero-percent deferred second loan and options equal to 3%, 4%, or 5% of the first mortgage.

Those second loans are due when the first mortgage ends. Work with an MMP-approved lender for current income, credit, and purchase-price limits.

Who can use 1st Time Advantage, Flex, and specialty products

1st Time Advantage loans are designed for eligible first-time homebuyers and are described as offering the lowest 30-year fixed rate available among MMP loans. You may also qualify if it has been more than three years since you owned a principal residence; if you are buying in a targeted area and will sell your current home before closing; or if you are an honorably discharged veteran who has not previously used the first-time homebuyer exemption, with a DD-214 and the Veteran First Time Homebuyer Exemption form. The Maryland HomeCredit Program (mortgage credit certificates) may not be layered with this product line.

Most 1st Time Advantage products come with a zero-percent, deferred loan for down payment assistance. Official product descriptions include:

• 1st Time Advantage Direct, which has no MMP down payment assistance but usually offers the most competitive rates, and may be combined with external assistance.
• 1st Time Advantage 6000, a $6,000 loan for down payment and closing costs, at zero interest, with no payments due for the life of the first mortgage. When the first mortgage ends by repayment, refinance, transfer, or sale, the second lien is due and payable. This line is eligible for additional assistance through the Partner Match Program, if applicable.
• 1st Time Advantage 3%, 4%, and 5% Loans, each with a down payment loan equal to that percentage of the first mortgage, as a zero-percent deferred second lien.
• HomeStart, for borrowers with income at or below 50% of area median income, with a 0% interest, 30-year deferred down payment loan equal to 6% of the MMP total loan amount (first lien).
• MMP-UPLIFT, for an eligible UPLIFT property, with assistance equal to 5% of the first mortgage.
• First Homes for First Responders and Teachers, with a down payment loan equal to 5% of the first mortgage as a zero-percent deferred second lien.

MMP Flex products are available to first-time or repeat homebuyers who meet MMP eligibility. Specialty options include Montgomery County programs, Maryland SmartBuy for eligible student debt, an FHA 203K Limited purchase-and-repair option, and HomeAbility for homebuyers with disabilities. If you use 1st Time Advantage 6000 or Flex 6000, financial assistance from one or more MMP-approved Partners may be matched, up to $2,500, as additional down payment assistance, according to the official down payment assistance page.

To qualify you must complete an approved homebuyer education class and meet standard MMP eligibility, including income limits, credit score, and purchase-price limits that the approved lender will apply from current matrices. The public pages do not print one fixed credit-score floor for every product and year, so use the current lender sheet rather than an outdated blog number. County income and price limits vary.

How to apply, and what the second mortgage means

Work only with an MMP-approved lender. The assistance is typically a second lien, not a gift, and official 1st Time Advantage descriptions treat the deferred second loan as due when the first mortgage is paid off, refinanced, transferred, or sold. There is no monthly payment on that second loan while the first mortgage remains in place, at a zero percent rate, as the program page describes. Ask the lender to show those terms in the second-mortgage documents before you reserve a loan.

Many counties and cities also offer local down payment or settlement assistance. Those programs have their own rules and may or may not be layerable with MMP. The official MMP site points to assistance organized by county. Employers, builders, and community groups may also offer help; confirm in writing whether it can be used with the product you choose.

MMP contact information on the program site includes 7800 Harkins Road, Lanham, MD 20706, main telephone 301-429-7852, and singlefamilyhousing.dhcd@maryland.gov. A licensed local real estate agent can help you find an approved lender and a property that fits the purchase-price limits, but the lender and MMP decide whether the file qualifies.

FAQ

How much down payment assistance does 1st Time Advantage 6000 provide?

The official product page describes a $6,000 zero-percent loan for down payment and closing costs, with no payments due for the life of the first mortgage, and the second lien due when that first mortgage ends.

Are percentage-based options available?

Yes. Official 1st Time Advantage listings include deferred second loans equal to 3%, 4%, or 5% of the first mortgage, plus HomeStart at 6% of the MMP total loan amount for borrowers at or below 50% of area median income.

Do I have to be a first-time buyer?

1st Time Advantage generally requires it, with exceptions after a three-year gap, for certain targeted-area purchases, and for eligible veterans who have not used the exemption. Flex products are also open to repeat buyers.

Is the assistance forgiven?

The official 1st Time Advantage descriptions treat the assistance as a zero-percent deferred second loan, not a forgivable grant, and state that it becomes due and payable when the first mortgage ends.

Next step

Talk with an MMP-approved lender and a licensed local real estate agent about current income and price limits, whether 1st Time Advantage, Flex, or a specialty product fits, and how the deferred second loan will be repaid.

Sources: Maryland Mortgage Program, Down Payment Assistance; Maryland Mortgage Program, MMP 1st Time Advantage; Maryland Mortgage Program, About MMP.

A Maryland property owner who disagrees with a reassessment may appeal to the State Department of Assessments and Taxation (SDAT) within 45 days of the notice date. The first hearing is informal, at the supervisor of assessments' level. If you disagree, you may appeal to the local PTAAB within 30 days of the final notice.

A further appeal may be taken to the Maryland Tax Court within 30 days of the PTAAB order.

When you may file, and how the supervisor-level appeal works

SDAT's Assessment Appeal Process page lists three occasions for an appeal: upon receipt of an assessment notice; by a petition for review in a year the property is not revalued; and upon purchase of property between January 1 and June 30. Maryland properties are generally reassessed every three years. The notice shows the old market value and the new market value.

For a reassessment, file online using the control number on the notice, or return the paper appeal form to the local assessment office. Appeals must be filed within 45 days of the notice date. SDAT attempts to complete reassessment appeals by June 1, depending on volume. You may choose a written appeal, a phone hearing, a video hearing, or an in-person hearing.

In the two years between full reassessments, you may file a petition for review by the first working day following January 1, which is useful if events since the last regular assessment have reduced the property's value. If you miss the 45-day window on a notice, you may still file a petition for the following year. If you purchase a property and the transfer occurs after January 1 but before July 1, you may file an appeal within 60 days of the transfer, after the deed is recorded.

The supervisor-level hearing is informal and is meant as an exchange of information, typically about 15 minutes. SDAT provides a property worksheet and an area sales listing at no cost before the hearing. You may postpone the hearing once if the date conflicts with your schedule. Focus on why the total new market value does not reflect current market value, mathematical errors or inaccurate property characteristics, and sales of comparable properties. SDAT says comparisons to past values, the percent of increase, the amount of the tax bill, and services rendered or not rendered are not relevant to the value under appeal. A homestead cap can limit the tax bill, but it is not a substitute for appealing an incorrect market value.

PTAAB, the Tax Court, and what to bring

After the supervisor-level hearing, you will receive a final notice. If you disagree, appeal to PTAAB within 30 days of that final notice date. PTAAB boards sit in each of the 24 jurisdictions. Members are local residents recommended by local government and appointed by the Governor, and they are independent of SDAT. No fee is required, and you may present evidence even if you did not use it at the first level. You may appear in person or appeal in writing. Up to two postponements may be granted. SDAT again provides a worksheet and a list of comparables it will use.

If you are dissatisfied with the PTAAB decision, you may file with the Maryland Tax Court within 30 days of the PTAAB order. There is no filing fee. You must be present; written hearings are not used at this level. Proceedings are still administrative but more formal, and they are de novo, meaning the case starts fresh. The parties must exchange lists of other properties they will rely on, with the details Tax Court Rule 7 requires, at least 10 days before the hearing. After the Tax Court, review is through the courts, where legal counsel is advised.

Pay the tax as the treasurer requires while an appeal is pending, following local instructions, so discounts are not lost and penalties do not accrue on amounts that remain due. A licensed local real estate agent or an appraiser can help you assemble comparable sales, but you are not required to hire a representative at the first two levels.

Bring a copy of the notice, your estimate of value, and a short list of comparable sales to the supervisor-level hearing. If you file a written appeal instead of attending, still review the worksheet and sales list SDAT sends, and contact the local office if you find errors after you have submitted the appeal.

FAQ

How long do I have to appeal a reassessment notice?

File with the local assessment office or online within 45 days of the notice date.

What is the next step after the supervisor-level hearing?

If you disagree with the final notice, appeal to the Property Tax Assessment Appeals Board within 30 days of that final notice.

Can a new owner appeal after a mid-year purchase?

If the property is transferred after January 1 and before July 1, the new owner may file an appeal within 60 days of the transfer, after the deed is recorded.

Do I have to hire an attorney to go to PTAAB?

No. SDAT notes that customers generally need no assistance at that step, no fees are required, and you may present supporting evidence yourself.

Next step

If you disagree with an assessment, file within the 45-day (or, for a mid-year purchase, 60-day) deadline, gather comparable sales, and ask a licensed local real estate agent or a property-tax professional to help you prepare for the supervisor-level hearing.

Sources: Maryland Department of Assessments and Taxation, Assessment Appeal Process; Maryland Property Tax Assessment Appeals Boards; Maryland Tax Court.

A Maryland seller of single-family residential property improved by four or fewer units must give the buyer the State's residential property condition disclosure or disclaimer form on or before entering into the contract. If the form arrives late, the buyer may rescind in writing within 5 days after receipt and recover deposits.

Real Property Article § 10-702 is the statute.

When the form is due, and what a disclaimer still has to say

The official form is developed by the State Real Estate Commission. A vendor must complete and deliver either the disclosure statement or the disclaimer statement on a Commission form. At delivery, each purchaser must date and sign a written acknowledgment of receipt, which is included in or attached to the contract of sale. For a land installment contract, or an option to purchase, the form must be delivered before the purchaser executes that agreement.

The disclosure statement is based on the seller's actual knowledge of listed items, including water and sewer systems, insulation, structural systems, plumbing, electrical, heating and air conditioning, wood-destroying insects, land use matters, hazardous or regulated materials, smoke alarms, and carbon monoxide alarms when the property relies on combustion of a fossil fuel. The seller is not required to hire an inspection in order to complete the form. The form is not a warranty, and it is not a substitute for an independent inspection. The representations are the owner's, not the agent's.

A disclaimer, sometimes described as an "as is" statement, does not let the seller stay silent about known latent defects. Section 10-702 defines a latent defect as a material defect that a purchaser would not reasonably be expected to ascertain or observe by a careful visual inspection, and that would pose a direct threat to the health or safety of the purchaser or an occupant. The disclaimer must disclose any such latent defects of which the vendor has actual knowledge.

The statute does not apply to every transfer. Among the exemptions are the initial sale of property that has never been occupied, or for which a certificate of occupancy was issued within one year before the contract; certain transfers that are exempt from transfer tax, with stated exceptions; a sale by a lender that acquired the property by foreclosure or deed in lieu of foreclosure; a sheriff's sale, tax sale, or court-supervised sale; a fiduciary transfer in the administration of an estate, guardianship, conservatorship, or trust; a transfer of property to be converted to a nonresidential use or demolished; and a sale of unimproved real property.

A purchaser who receives the form on or before entering into the contract does not have a right to rescind based only on the information in the statement. A purchaser who does not receive it on time has an unconditional right, on written notice to the vendor or the vendor's agent, to rescind before receiving the form or within 5 days following receipt, and to the immediate return of deposits. That right can end earlier if the purchaser applies for a mortgage and the lender gives a written disclosure that the right terminates on the application or five days after that disclosure, as § 10-702(h)(2) describes. The right is also waived if it is not exercised before closing or occupancy, whichever occurs first. The contract must include a conspicuous notice of these rights, and a waiver in the contract of sale is void.

How buyers and sellers should use the form

Download the official Residential Property Disclosure and Disclaimer Statement from the Maryland Department of Labor rather than an unofficial copy. Sellers should complete it from current actual knowledge and update the buyer if they later learn of a new defect. Buyers should read it with the inspection, calendar the five-day rescission period if the form arrives after the contract is signed, and put any rescission in writing. A licensed local real estate agent has a duty to inform the client of these rights and obligations, but the agent's explanations do not turn the form into a warranty.

Beginning July 1, 2027, sellers of certain residential properties will also have to provide a flood risk disclosure and, if available, a FEMA Elevation Certificate, according to the Maryland Insurance Administration. That future form is in addition to, not a substitute for, § 10-702.

FAQ

When must the seller deliver the disclosure or disclaimer?

On or before entering into the contract of sale, except that a land installment contract or an option to purchase requires delivery before the purchaser executes that agreement.

What if I receive the form after I have already signed the contract?

You generally have an unconditional right to rescind in writing before you receive the form, or within 5 days after you receive it, and to recover deposits, unless a mortgage-application disclosure or closing or occupancy has already ended that right.

Does an "as is" disclaimer hide known safety defects?

No. The disclaimer must still disclose latent defects of which the seller has actual knowledge that would pose a direct threat to health or safety and that a careful visual inspection would not reasonably reveal.

Is the disclosure a warranty?

No. The statute states that the disclosure is not a warranty as to conditions of which the vendor has no actual knowledge, and it is not a substitute for an independent inspection.

Next step

Ask a licensed local real estate agent or a Maryland real estate attorney to confirm that the official form was signed and delivered on time, and to calendar the five-day rescission period if the form arrives after the contract is signed.

Sources: Real Property Article § 10-702; Maryland State Real Estate Commission, Residential Property Disclosure and Disclaimer Statement.

Maryland's state property transfer tax is generally 0.5% of the consideration payable for the instrument of writing. For a sale of improved residential real property to a first-time Maryland home buyer who will occupy the property as a principal residence, the rate is 0.25% and the seller pays the entire state transfer tax.

Tax-Property Article § 13-203 is the statute. County recordation taxes, and any county transfer tax, are separate charges.

How the state tax is figured, and who is a first-time Maryland home buyer

Section 13-203(a) sets the ordinary rate at 0.5% of the consideration payable for the instrument of writing. Consideration includes the amount of any mortgage or deed of trust assumed by the grantee, and otherwise includes only the amount paid or delivered in return for the sale of the property. It does not include the amount of any debt forgiven or no longer secured by a mortgage or deed of trust on the property.

Subsection (b) defines a "first-time Maryland home buyer" as an individual who has never owned in the State residential real property that has been the individual's principal residence. That is a Maryland-specific definition. A person who has owned a principal residence only in another state, or who has owned Maryland property that was not a principal residence, may still meet this definition. If there are two or more grantees, the reduced rate does not apply unless each grantee is a first-time Maryland home buyer, or is a co-maker or guarantor of a purchase-money mortgage or deed of trust who will not occupy the residence.

When the sale is of improved residential real property to a qualifying first-time Maryland home buyer who will occupy it as a principal residence, the transfer tax rate is 0.25% of the consideration, and the transfer tax shall be paid entirely by the seller. To qualify, each grantee or an agent of the grantee must provide a statement signed under oath with the facts the statute requires, including that the grantee has never owned in Maryland a residential principal residence and will occupy this one, or that the grantee is only a non-occupying co-maker or guarantor.

Do not confuse the state transfer tax with other settlement charges. Maryland counties impose recordation taxes, and some counties or municipalities also impose a local transfer tax. Those rates are local and can change. They are not a single statewide percentage, and unofficial articles that quote one "Maryland closing tax" as a flat combination often mix state and local charges. Ask the closer or the county land records office for the current local rates that apply to the property, and review them on a draft settlement statement.

The first-time reduction applies to the state transfer tax described in § 13-203. It does not automatically waive county recordation tax or a county transfer tax. Some local laws have their own first-time or owner-occupant rules; confirm those locally rather than assuming they match the state definition.

What to review before closing

If you believe you qualify as a first-time Maryland home buyer, tell the lender and the settlement attorney early, and be prepared to sign the required affidavit. If one of two buyers has already owned a Maryland principal residence, the 0.25% seller-paid rule generally will not apply. If you are the seller, ask how the 0.25% or 0.5% state tax, plus local recordation and transfer charges, will appear on the settlement statement, rather than relying on a listing's estimate.

Knowingly inaccurate closing figures are a serious matter. Read the consideration, assumed mortgages, and first-time-buyer statement carefully before you sign. A licensed local real estate agent can help you budget for these taxes, but the deed, the affidavit, and the county's published rates are the documents that control.

Sellers and buyers should also ask whether any local first-time or owner-occupant reduction applies to the county recordation tax or a county transfer tax, because those rules are not the same as the state definition in § 13-203. A draft settlement statement is the place to see the state 0.5% or 0.25% line next to the local charges. If the consideration includes an assumed mortgage, confirm that the figure used for the tax matches the statute. Keep the signed first-time Maryland home buyer affidavit with the closing packet if you used the reduced rate.

FAQ

What is the ordinary Maryland state transfer tax rate?

Tax-Property Article § 13-203(a) sets the rate at 0.5% of the consideration payable for the instrument of writing, with the statutory definition of consideration.

How does the first-time Maryland home buyer rate work?

For a sale of improved residential property to a first-time Maryland home buyer who will occupy it as a principal residence, the rate is 0.25% and the seller pays the entire state transfer tax.

Who is a first-time Maryland home buyer?

The statute defines the term as an individual who has never owned in Maryland residential real property that has been the individual's principal residence.

Does this waive county recordation tax?

No. County recordation taxes, and any local transfer tax, are separate from the state transfer tax and are set locally.

Next step

Ask your settlement attorney or a licensed local real estate agent to show the 0.5% or 0.25% state transfer tax, the first-time-buyer affidavit if it applies, and the separate county recordation or local transfer charges on a draft settlement statement before you close.

Sources: Tax-Property Article § 13-203; Maryland Department of Assessments and Taxation.