Germantown is one of the largest communities in Montgomery County, stretched along I-270 and MD 118 with a MARC station on the Brunswick Line. Much of it was built from the 1970s on, so sellers here deal with a mix of townhomes, single-family subdivisions, and a few older houses on the edges. Montgomery County also has some of the more complicated closing-cost rules in Maryland.
I’m Evan Weissman. I buy houses around Maryland, including Germantown, Gaithersburg, Clarksburg, Boyds, and Damascus. Here’s what Germantown sellers ask me most, with official sources.
Germantown is part of Montgomery County, not its own town
Germantown is unincorporated. There’s no Germantown city government or town tax. Property taxes, permits, and most local rules come from Montgomery County.
The SDAT 2026-2027 tax rate table lists Montgomery County’s general rate at 0.6706 per $100 and the state rate at 0.1120. Montgomery bills also include special area charges, so the real total is higher. The Department of Legislative Services table, which counts those special rates, shows the county portion at about 1.04 per $100.
Montgomery’s homestead credit cap is 10%, so the gap between what you pay and what a new buyer will pay is often smaller than in counties with lower caps.
Montgomery’s tiered recordation tax
This is the cost that surprises sellers most. Montgomery County changed its recordation tax effective October 1, 2023, under Bill 17-23. According to the county’s Department of Finance, the rate has a base portion of $2.08 per $500 plus a school increment of $2.37 per $500 on all amounts, for $4.45 per $500. Higher portions of the price pay a premium on top:
| 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 |
| Over $1,000,000 | $11.35 |
The county’s own examples show two more details. Each tier applies only to the part of the price within it. And when the buyer files a principal residence affidavit, the first $100,000 of consideration is exempt from recordation tax.
Here’s a $550,000 example. With the principal residence exemption, recordation is $3,560 on the $400,000 from $100,000 to $500,000, plus $675 on the last $50,000, for $4,235. Without it, it’s $4,450 plus $675, or $5,125.
Transfer taxes
The state transfer tax is 0.5%, or 0.25% for a first-time Maryland homebuyer. On $550,000, the regular state amount is $2,750. Montgomery’s county transfer tax is 1% for most home sales under County Code section 52-31, or $5,500 on the same price. My Montgomery County transfer tax article has a full worked example.
Lower county rates apply only to sales under $70,000, and some transfers qualify for exemptions, so your title company will confirm the exact figure for your price and buyer.
By default, Maryland law splits recordation and transfer taxes equally between buyer and seller. For a qualifying first-time Maryland homebuyer, the seller pays the state transfer tax and, unless the contract says otherwise, the county taxes too. My first-time buyer article explains that rule.
Deferred water and sewer charges
In some Montgomery County subdivisions, the developer installed the water and sewer lines, and homes there can carry a deferred water and sewer charge recorded in a covenant. It’s usually an annual fee that shows up on the tax bill or a separate bill.
Real Property Section 14-117 requires a resale contract for a home with these recorded charges to include a specific notice with the amount and remaining payments, unless the county has its own similar rule. If the notice is missing, the buyer may be able to rescind before settlement or recover the fees afterward. Check your tax bill for the charge and tell your agent or title company before you sign a contract.
If taxes are behind
SDAT’s tax sale schedule listed Montgomery County’s 2026 sale for June 8. If you’re behind, call the county’s tax office and the State Tax Sale Ombudsman at (410) 767-4994 to learn your options. A sale can also pay the overdue amount from your proceeds. How Maryland tax sales work has more.
Estates
The Montgomery County Register of Wills is at 50 Maryland Avenue, North Tower 3220, in Rockville, 240-777-9600, according to the Register of Wills site. Estates are opened there, and the personal representative appointed there signs the deed. See selling an inherited house for how I work with estates.
What Germantown buyers usually check
In the 1980s and 1990s homes and townhomes I see in Germantown, inspections tend to focus on:
- Original roofs, siding, and windows reaching the end of their life
- HVAC systems and water heaters
- Decks built before current codes
- Basement water in homes on slopes
- HOA approval for exterior changes, in communities that have one
Listing vs. a direct sale
Germantown homes in good shape near transit and schools tend to draw buyers on the open market. A direct cash sale can make more sense if the house needs a lot of work, has tenants, or is part of an estate. My Montgomery County page and Montgomery County guide cover the broader area.
How much is recordation tax in Montgomery County?
$4.45 per $500 on the first $500,000, with higher rates on portions above that. The first $100,000 can be exempt when the buyer files a principal residence affidavit.
Does Germantown have a city tax?
No. Germantown is unincorporated, so homes pay Montgomery County and state property taxes only, plus any special area charges.
What is a deferred water and sewer charge?
A recorded annual fee that repays the cost of water and sewer lines a developer installed. Maryland law requires a notice in the resale contract.
When is the Montgomery County tax sale?
SDAT listed June 8 for 2026. Confirm each year with the county.
Who calculates Montgomery’s transfer tax?
Your title or settlement company. The rate depends on the property and any exemptions.
Talk through your situation
If you’re selling in Germantown and want to see a cash number next to your listing estimate, call or text me at (410) 498-7473. I’ll go through the closing costs with you too.