Montgomery County MD Transfer and Recordation Tax: Complete 2026 Guide

Transfer and recordation taxes are the biggest closing cost surprise in Maryland. Most buyers expect lender fees and title charges. They don't expect to write a check for $12,000–$15,000 in taxes on top of everything else. On a $650,000 home in Montgomery County, that's exactly what you're looking at. Here's how it works.

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Maryland's Transfer and Recordation Tax Structure

Maryland has four separate layers of tax on real estate transactions. Two are transfer taxes (state and county), and two are recordation taxes (state and county). Each is calculated differently.

1. Maryland State Transfer Tax

Rate: 0.5% of the sale price.

First-time buyer rate: 0.25% on the first $400,000 of purchase price if the buyer is a first-time homebuyer. The standard 0.5% rate applies above $400,000 and to all buyers who aren't first-timers.

Who pays: Typically split 50/50 between buyer and seller by default in Maryland. However, this is negotiable — in a seller's market, buyers often pay their full share; in a buyer's market, sellers may absorb both halves.

Example on $650,000 (standard buyer):

• $650,000 × 0.5% = $3,250 total
• Split: buyer pays $1,625, seller pays $1,625

Example on $650,000 (first-time buyer):

• First $400,000 × 0.25% = $1,000
• Remaining $250,000 × 0.5% = $1,250
• Total: $2,250 (buyer's portion, if split: ~$1,125 buyer + $1,125 seller)

2. Montgomery County Transfer Tax

Rate: 1.0% of the sale price.

Who pays: Also typically split 50/50 (buyer and seller each pay 0.5%), but negotiable.

First-time buyer exemption: Montgomery County offers a partial exemption for first-time buyers purchasing below certain price thresholds, subject to income limits. Check with your agent or settlement company for the current income and price thresholds as these update periodically.

Example on $650,000:

• $650,000 × 1.0% = $6,500 total
• Split: buyer pays $3,250, seller pays $3,250

3. Maryland State Recordation Tax

Rate: $6.00 per $1,000 of the loan amount (not purchase price).

Note: In Montgomery County, the combined state + county recordation rate amounts to approximately $6.90–$7.00 per $1,000. The state portion is $6.00 per $1,000.

Who pays: Generally paid by the buyer, as it relates to recording the new mortgage.

Example on $585,000 loan (10% down on $650,000):

• $585,000 × $6.00 / $1,000 = $3,510

First-time buyer rate: First-time buyers pay a reduced recordation tax rate of $1.00 per $1,000 (instead of $6.00) on the first $500,000 of the loan amount.

Example on $585,000 loan (first-time buyer):

• First $500,000 × $1.00 / $1,000 = $500
• Remaining $85,000 × $6.00 / $1,000 = $510
• Total: $1,010 (vs. $3,510 for non-first-time buyers)

4. Montgomery County Recordation Tax

Rate: $0.90 per $1,000 of the loan amount (part of the total ~$6.90/per $1,000 combined rate).

This is collected with the state recordation tax and paid to the county.

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Total Transfer and Recordation Tax: Side-by-Side Examples

At $450,000 Purchase Price

| Tax | Standard Buyer | First-Time Buyer | |---|---|---| | State transfer tax (buyer's half) | $1,125 | ~$563 | | County transfer tax (buyer's half) | $2,250 | ~$1,125 (may have exemption) | | State + county recordation (on $405K loan) | $2,795 | ~$695 | | Total buyer costs | ~$6,170 | ~$2,383 |

At $650,000 Purchase Price

| Tax | Standard Buyer | First-Time Buyer | |---|---|---| | State transfer tax (buyer's half) | $1,625 | ~$1,125 | | County transfer tax (buyer's half) | $3,250 | ~$1,625–$3,250 | | State + county recordation (on $585K loan) | $4,037 | ~$1,060 | | Total buyer costs | ~$8,912 | ~$3,810–$5,435 |

At $850,000 Purchase Price

| Tax | Standard Buyer | First-Time Buyer | |---|---|---| | State transfer tax (buyer's half) | $2,125 | ~$1,625 | | County transfer tax (buyer's half) | $4,250 | ~$2,125–$4,250 | | State + county recordation (on $765K loan) | $5,279 | ~$1,579 | | Total buyer costs | ~$11,654 | ~$5,329–$7,454 |

Note: These are estimates based on standard split assumptions. Actual amounts depend on negotiated allocation between buyer and seller, and first-time buyer exemption eligibility.

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Who Pays Transfer Taxes: Buyer vs. Seller

Maryland law allows transfer taxes to be allocated however buyer and seller agree. The 50/50 default is customary — not required.

In a seller's market (like spring 2026 Montgomery County): Sellers routinely receive offers where buyers agree to pay their own full share (and sometimes the seller's share) to make the offer more attractive. When there are 10+ offers on a home, buyers sometimes absorb the full transfer tax to compete.

In a buyer's market or negotiated transaction: Sellers may offer to pay the full transfer tax as a seller concession, reducing the buyer's out-of-pocket at closing.

For sellers: Your portion of the transfer taxes is a deduction from your proceeds at settlement. On a $650,000 sale, your transfer tax cost (state + county combined) is approximately $4,875 at the standard 50/50 split.

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Transfer Tax vs. Recordation Tax: What's the Difference?

Transfer tax = a tax on the transfer of ownership. It's calculated on the sale price and applies when title changes hands from seller to buyer.

Recordation tax = a tax on recording a new mortgage (deed of trust) with the county. It's calculated on the loan amount and applies when a new lien is recorded. Refinancing also triggers recordation tax.

Both are often referred to loosely as "transfer taxes" but they're separate calculations with different bases and different exemption rules.

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First-Time Buyer Exemptions: What You Actually Save

If you qualify as a first-time buyer (no ownership of a principal residence in the last three years), the exemptions are significant:

| Tax | Standard Rate | First-Time Buyer Rate | Savings on $650K | |---|---|---|---| | State transfer tax | 0.5% | 0.25% on first $400K | ~$500 | | County transfer tax | 1.0% | Possible partial exemption | Varies | | State recordation | $6/per $1K | $1/per $1K on first $500K | ~$2,500 |

Combined, a first-time buyer on a $650,000 purchase can save $3,000–$6,000 in taxes compared to a repeat buyer. This is real money that should factor into your loan-vs.-cash and program-stacking decisions.

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Frequently Asked Questions

How much are transfer taxes on a $650K home in Montgomery County?

For a standard (non-first-time) buyer at a 50/50 split: approximately $8,500–$9,500 in combined state transfer, county transfer, and state/county recordation taxes. First-time buyers can reduce this to $3,500–$5,500 with applicable exemptions.

Who pays transfer taxes when buying a home in Montgomery County?

Maryland custom is a 50/50 split between buyer and seller, but this is negotiable. In competitive spring markets, buyers often pay their full half. In slower markets, sellers may offer concessions covering part or all of the buyer's share.

What is the Montgomery County transfer tax rate?

1.0% of the sale price, typically split 50/50 (buyer pays 0.5%, seller pays 0.5%). First-time buyers may qualify for partial exemptions depending on income and purchase price.

What is the Maryland recordation tax rate?

The combined state and county recordation tax in Montgomery County is approximately $6.90 per $1,000 of the loan amount. First-time buyers pay a reduced state rate of $1.00 per $1,000 on the first $500,000 of the loan.

Is there a first-time buyer exemption on Maryland transfer taxes?

Yes. First-time buyers pay a reduced state transfer tax rate of 0.25% (instead of 0.5%) on the first $400,000 of purchase price, and pay a reduced recordation tax rate of $1.00 per $1,000 (instead of $6.00) on the first $500,000 of loan amount. Montgomery County also has a county transfer tax exemption for qualifying first-time buyers.

Do I pay transfer taxes when refinancing in Montgomery County?

The state and county transfer taxes do not apply to refinances — those only apply when ownership transfers. However, recordation taxes do apply when recording a new deed of trust (mortgage) during a refinance. The rate is the same as a purchase.

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Related Resources

• The Real Cost of Buying a Home in Maryland: Closing Costs, Taxes, and Fees
• Montgomery County MD Property Tax Rate (2026): What Homeowners Actually Pay
• First-Time Home Buyer Programs in Maryland (2026)
• How to Look Up Montgomery County Real Estate Records

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