New Montgomery County Recordation Tax Law

New Montgomery County Recordation Tax Law

 Effective March 1, 2008

Effective March 1, 2008, the recordation taxes for Montgomery County, Maryland will be increased to $10 per $1000 for consideration payable over $500,000.00.  Consideration payable of $500,000.00 or less will continue to be taxed at the current rate of $6.90 per $1000.00.  The tax calculation will continue to exempt the first $50,000.00 of the sales price from recordation tax if the property is to be owner occupied.  The new Act applies to any transaction that occurs on or after March 1, 2008.  The new Act, however, does not affect the existing State and Montgomery County transfer taxes.  To avoid any confusion in advising or preparing net sheets for your clients, we are providing the following examples as to how the new Montgomery County recordation tax will be applied.

Consideration (i.e. Sales Price) of $600,000.00 for a Principal Residence:

            First $50,000 of sales price is exempt from recordation tax

            The next $450,000 of sales price is taxed at $6.90/$1000

            The remaining $100,000 of sale price is taxed at $10/$1000

Total Recordation Tax:  $4,105.00

Total County Transfer Tax (1%):  $6,000.00

Total State Transfer Tax (.50%):   $3,000.00

Consideration (i.e. Sales Price) of $600,000.00 but will NOT be a Principal Residence:

            First $500,000 of sales price is taxed at $6.90/$1000

            Next $100,000 of sales price is taxed at $10/$1000

Total Recordation Tax:  $4,450.00

Total County Transfer Tax (1%):  $6,000.00

Total State Transfer Tax (.50%):   $3,000.00

Consideration (i.e. Sales Price) of $375,000.00 for a Principal Residence:

            First $50,000 of sales price is exempt from recordation tax

            Remaining $325,000 of sales price is taxed at $6.90/$1000

Total Recordation Tax: $2,242.50

Total County Transfer Tax (1%):  $3,750.00

Total State Transfer Tax (.50%):   $1,875.00

Consideration (i.e. Sales Price) of $375,000.00 but will NOT be a Principal Residence:

            Full sales price of $375,000 is taxed at $6.90/$1000

Total Recordation Tax:  $2,587.50

Total County Transfer Tax (1%):  $3,750.00

Total State Transfer Tax (.50%):   $1,875.00