When you sell a house in Montgomery County, three government charges show up on the settlement statement: the county transfer tax, the county recordation tax, and the state transfer tax. Together they can come to well over $10,000 on a typical sale, so it’s worth knowing where the numbers come from before you look at an offer.
I’m Evan Weissman. I buy houses in Montgomery County and around Maryland. This article goes to the official sources: the county code for the transfer tax, the county Department of Finance for recordation, and state law for the state tax and the default split.
The rate in the county code
Montgomery County’s transfer tax is set in Section 52-31 of the County Code. For improved residential property, which means a property with a finished structure on it, the rates are:
- 0.25% when the full consideration is under $40,000
- 0.50% from $40,000 up to $70,000
- 1% at $70,000 or more
In practice, almost every house sale in the county falls in the 1% tier. The same section sets 1% for unimproved land and higher rates for special cases, like land assessed as farmland and certain rezoned property.
Recordation tax in tiers
Recordation tax is separate from the transfer tax. Since Bill 17-23 took effect on October 1, 2023, the county’s Department of Finance has applied tiered rates per $500 of consideration:
| Portion of the price | Rate per $500 |
|---|---|
| Up to $500,000 | $4.45 |
| $500,000 to $600,000 | $6.75 |
| $600,000 to $750,000 | $10.20 |
| $750,000 to $1,000,000 | $10.78 |
| Above $1,000,000 | $11.35 |
Each rate applies only to the part of the price in that band. When the buyer files a principal residence affidavit, the first $100,000 is exempt.
The state’s share
On top of the county taxes, Maryland charges a 0.5% state transfer tax under Tax-Property section 13-203. For a qualified first-time Maryland homebuyer buying a home to live in, the state rate drops to 0.25% and the seller pays it.
The math on a $675,000 sale
Here’s a $675,000 sale where the buyer will live in the home and files the principal residence affidavit. The recordation figures match an example the county itself published:
- County transfer tax at 1%: $6,750
- State transfer tax at 0.5%: $3,375
- Recordation tax: $0 on the first $100,000, $3,560 on the next $400,000, $1,350 on $500,000 to $600,000, and $1,530 on the last $75,000, for $6,440
- Total: $16,565
Without the affidavit, recordation on the same price would be $7,330, so the total rises to $17,455.
Who pays which part
Maryland Real Property section 14-104 says that unless the contract says otherwise, buyer and seller split transfer and recordation taxes equally. In the example above, that’s about $8,283 each.
The first-time buyer rule changes the default. When the buyer qualifies, the seller pays the reduced state transfer tax, and unless the contract says otherwise, the seller also pays the county transfer and recordation taxes. On a Montgomery County sale, that can move several thousand dollars onto the seller, so check the buyer’s status before you accept an offer. My article on first-time buyer tax rules explains how it works.
Exemptions and special cases
State law and the county code each list transfers that are exempt from part or all of these taxes, and the two lists don’t line up perfectly. Most exemptions involve transfers where little or no money changes hands, not ordinary sales. Ask your title company to confirm before settlement if you think one applies. If you inherited the house and are selling as personal representative, the sale to an outside buyer is usually taxed like any other sale.
Where these taxes fit with other costs
Deed taxes are only part of the picture. Sellers also pay off the mortgage and any liens, settle up property taxes and WSSC Water charges, and pay any commission. Montgomery homes can also carry deferred water and sewer charges that need to be disclosed or paid. My Germantown guide and Silver Spring guide cover those local items, and my cost of selling article covers the rest.
A direct sale and the same taxes
These taxes apply whether you list or sell directly to a buyer like me. In a direct sale, the buyer sometimes agrees to cover more than half, and that’s worth comparing alongside price. My Montgomery County page and the cash offer vs. listing page can help you compare.
What is the Montgomery County transfer tax rate on a house?
For improved residential property sold for $70,000 or more, it’s 1% of the consideration under County Code section 52-31.
Is Montgomery’s recordation tax the same as its transfer tax?
No. Recordation is a separate, tiered tax per $500 of the price, starting at $4.45 per $500.
Does the $100,000 recordation exemption help the seller?
Yes, when the taxes are split. The buyer’s principal residence affidavit lowers the total recordation tax, so each side’s half is smaller.
Who pays the transfer tax in Montgomery County?
By default, buyer and seller split it equally. Your contract can change that, and a first-time buyer purchase can shift it to the seller.
Talk through your situation
If you’re selling in Montgomery County and want to see what these taxes mean for your net, call or text me at (410) 498-7473. I’ll go through the numbers with you.