Customary in the state of Maryland is a split of transfer and recordation charges between a buyer and a seller. Section 14-104(b) of the Real Property Article, Annotated Code of Maryland provides that, unless otherwise negotiated in the contract or provided by State or local law, the cost of any recordation tax or any State or local Transfer Tax shall be shared equally between the buyer and seller.
In Worcester County, the transfer and recordation fees total 1.66% of the purchase price. Recordation tax is an excise tax imposed by the State of Maryland for the privilege of recording a sale in the land records. The current recordation tax is $6.60 per thousand of value, and this number does not change if the transaction is for the purchase of a home. However, discounts are available for refinances.
Real estate transfer taxes are taxes imposed on the transfer of title of real property. In most cases, it is an ad valorem tax that is based on the value of the property transferred. In Maryland, the transfer tax is a total of 1% of the sales price. One-half of the 1% is payable to the county, and the other half is payable to the state. Discounts are available for primary residences and first-time homebuyers:
If a buyer is going to live in the home year round, the first $50,000 is exempt from the .5% county transfer tax, which nets to a $250 discount (.5% of $50,000). This discount is customarily split between buyer and seller in our area unless otherwise agreed upon.
If a buyer is a first time Maryland home buyer and the home is going to be a primary residence, one half of the state transfer tax is waived, and the other half of the state transfer tax is paid for by the seller. There is no additional cost to a seller to work with a first-time homebuyer, unless the first-time homebuyer addendum states otherwise. This is a state program, so there is no break on the county side.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
