Maryland


The South Mountain group offers services specific to the state of Maryland. This page details those services.

Property Taxes:

Tax year: The Maryland tax year runs July – June, with July through December being the first half, and January – June being the second half. Taxes are generally paid semi-annually or annually. Taxes are calculated using the assessed value of the property.

Maryland Tax Collectors by County:

Click here for a comprehensive list of Maryland Tax Collectors, by county, with contact information for each.

County Online Property Tax Information:

Most Maryland Counties provide helpful websites that allow home owners to view their current tax information, bill and payments online. Go to www.google.com, and type “Property taxes for Carroll County,” or the county you are inquiring about. Click here to see our list of Maryland online property tax websites.

Payment of Property Taxes at Closing:

In refinances, most lenders require that taxes are current and up to date and all taxes due within 30-90 days of closing are collected and paid at closing.

The same is true for sales. Additionally, taxes for sales are prorated in such a manner that the seller will pay taxes through settlement, or credit the buyer with the same. From the date of settlement forward, the buyer shall pay taxes.

Be aware, that it can take a year, sometimes more, for the new owners name to appear on tax bills. However, the purchaser is responsible for all taxes, and other county and state fees, such as water or sewer, from the date of closing. Likewise, all bills prior to closing remain the sellers responsibility.

Water/Sewer/Tax Liens/Etc. and Lien Certifications:

Many counties, in sales transactions, require a lien cert. In all counties, and as noted above, all county or state required fees (fees assessed to the property owner by the county or state) are the responsibility of the seller to the date of closing. If any such bills remain open after closing, the seller is responsible for such expenses even after the date of closing, if the bill was incurred during their ownership.

Lien certifications provided by the county will provide a listing of such open bills–however, the counties DO NOT guarantee the accuracy of said certifications, and thus the seller must understand, and at closing, sign an affidavit accepting responsibility for such fees.

Examples of counties requiring lien certifications are Baltimore City, Baltimore County, Anne Arundel County, and Carroll County. A lien cert. costs between $10.00- $40.00, depending on the county, and must be renewed if it is not up to date at the time of recording.

All closing involving properties with public water or sewer will required the escrowing of funds to cover said fee, and the title company and parties to the transaction work together to ensure that these utilities are paid through the closing date. If additional funds are needed, the seller will be contacted and expected to promptly pay any differences.

Failure to pay the above mentioned items in a timely manner can affect the final recording of the deed on the property.

Recording Fees:

Recording fees in Maryland are generally $60.00 (this includes required $40 surcharge effective July 1, 2011) dollars for deeds and deed of trusts, and $30.00 dollars for releases.

In some counties, investment properties charge $95.00 to record a deed of trust, such as Baltimore City. See below break down, to include required SURCHARGE:

$10.00 RELEASE nine (9) pages or less in length;
$20.00 ANY INSTRUMENT nine (9) pages or less in length or for any instrument over nine (9) pages in length if it involves solely a principal residence. It must be stated in the body of the instrument. (Do not count the intake sheet.) This includes Termination Statements of UCC Filings in Land Records and Financing Statements.
$75.00 ANY INSTRUMENT ten (10) pages or more in length.
$15.00 REQUEST FOR NOTICE OF SALE
$2.50 PLATS (We require 2 Mylar copies to be recorded)Total $5.00No surcharge. We only record lot line plats/lot line revisions/subdivisions. We do not record sewage reserve; wetlands; easements, etc.
DEEDS *Recording Fee for number of pages in the instrument is the same as above.
RECORDATION TAX Please see link below
COUNTY TRANSFER TAX Please see link below
STATE TRANSFER TAX 1/2 of 1% of the Purchase Price or .25% of the purchase price for Maryland First Time Home Buyer purchasing a principal place of residence. This must be a signed affidavit included in the Deed. For Information regarding Maryland First Time Home Buyer see Tax Property 13-203(b) in the Annotated Code of Maryland.
SURCHARGE for LAND RECORDS ALL INSTRUMENTS executed July 1, 2011, or after, the Surcharge fee is $40.00. Any document executed prior to July 1, 2011, the Surcharge Fee is $20.00. Exceptions: There is no Surcharge to record a Notice of Sale, Power of Attorney, Plats & Documents filed in Homeowner’s Association Docket.
Please note that Recording Fees, Surcharge, Recordation, County and State Transfer Taxes are collected by the Clerk’s Office. Checks submitted are to be made payable to Circuit Court Clerk.

Recordation Taxes and State and County Transfer Taxes:

In sales, recordation, state and county transfer taxes are charged based on the consideration (Sales price) of the property, or the total of the mortgages, which ever is higher. The rates are listed in the charts below.

In refinances, only a recordation tax is charged by the county, based on the difference between the payoff of the old mortgage and the amount of the new mortgage. If the old mortgage is higher than the new mortgage, no recordation tax is paid. If there is no old mortgage, the calculation is based on the amount of the new mortgage.

To calculate your recordation tax, please see the table below and select the tax applicable to your county, and follow the following formula.

New loan amount – old loan amount / 500 x the rate listed below = amount of recordation tax due at closing.

Recordation Tax Rates:

Recordation tax rates are shown as dollars per $500 of the transaction. The recordation tax is imposed under Title 12 of the Tax – Property Article, Annotated Code of Maryland.

Note: The Department of Assessments and Taxation provides tax rate information on our website as a courtesy to the citizens of the State of Maryland. The Department does not regulate or collect taxes these are functions of local governments. If you have questions regarding the rates listed below please contact the Clerk of the Court for the the appropriate County.

Frederick County recordation tax is now $6.00 per $500 of the transaction. Please be aware that the state has not made this update yet.

http://www.dat.state.md.us/sdatweb/recordation.html

To calculate transfer taxes, use the consideration or sales price of the property and multiply by the applicable transfer tax. The counties transfer tax are listed in the chart below. The state appears in bold underline, below. If you are a first time home, please see the section entitled First Time Home Buyers, below.

Transfer Tax Rates:

Transfer tax rates are shown as a percentage of the consideration payable. The transfer tax is imposed under Title 13 of the Tax – Property Article, Annotated Code of Maryland. The State transfer tax rate is 0.5%. Higher rates may apply to agricultural land under Title 13, Subtitles 3 and 5 of the Tax – Property Article.

Note: The Department of Assessments and Taxation provides tax rate information on our website as a courtesy to the citizens of the State of Maryland. The Department does not regulate or collect taxes these are functions of local governments. If you have questions regarding the rates listed below please contact the Clerk of the Court for the the appropriate County.

http://www.dat.state.md.us/sdatweb/transfer.html

First Time Home Buyers:

First time home buyers must meet the following criteria:

A. The buyer has never owned a residential real property in Maryland that has been the individual’s principal residence AND

B. The residence will be occupied as a principal residence OR

C. The buyer is a co-maker or guarantor of a mortgage or deed of trust to be secured by the property and the co-maker or guarantor will not occupy the property as a principal residence.

A and B OR C must apply and the borrower shall sign an affidavit under oath at closing attesting the above is true.

Once this is determined, the buyer is exempt from the state transfer tax, and only the seller pays their portion, which becomes .25 percent of the consideration, at closing.

Also, note that in Maryland, it is customary in sales that the buyer and seller split the taxes, with the exception of the FHB noted above. Some counties offer other discounts for FHB.

Payment of Recordation and Transfer Taxes at Closing:

If by signed agreement the parties agree, however, the buyer, seller may assume responsibility for all taxes, or some other agreement may be determined. The title company must be notified of such, or the customary split of said taxes shall be applied.

Determining Property Ownership:

In Maryland, you may determine property ownership by visiting the States real property data base. You need to have the proper address. Click here to visit the MD Real Property Database.

Maryland Title Insurance Rates:

Note-this is intended to provide an estimate only. Final title insurance rates will appear on a mock HUD, included with your title commitment.

Click here to see a table of Maryland title insurance rates.

1099 Reporting to the IRS:

At closing, the seller will review a Certification of No Information Reporting if the sale of their property results in proceeds of less than $250,000 as an individual or $500,000 if a married couple.

If the proceeds are higher than this, the seller may chose to have the title company report the 1099 filing to the IRS, or may elect, in writing, to have the tax accountant or attorney do their 1099 filing.

Out of State or Non Resident Sellers of Maryland Properties:

Non Maryland resident sellers must pay additional taxes as a non resident at closing.

Maryland residents whom are sellers will sign an Affidavit of Residency at closing, to be recorded with their deed.

The rate for individuals is 6 percent and for entities is 7 percent.

Click here for more information.

Investment Properties and Commerical Transactions:

If you are buying an investment or commercial property, please notify the title company prior to closing so we can help you meet all counties requirements regarding the same. For example, rental properties in Baltimore City are required to be register prior to a new deed being recorded. Additionally, requirements such as the amount of recordation tax can go up if a property is an investment property, and thus, failure to notify us at closing could result in a shortage of applicable taxes being collected. Such failure can result in the delay of recording your deed and deed of trust, and after closing will become the responsibility of the buyer to pay.

1031 Transactions:

If your property is going to be a part of a 1031 exchange, you must also notify the title company prior to closing. Failure to do so could result in transaction not going through an intermediary. Even the failure to correctly follow any of the required steps under the Federal Tax Law regarding 1031 Exchanges, will negate the transaction, and the tax benefits will no longer be available.

Further, a Qualified Intermediary will be provided. At The South Mountain Group, Inc. our intermediary’s are all Certified Public Accountants, and will guide you step by step through the process.

Click here for more information about 1031 Exchanges.

Payoffs of Liens and Judgments:

All current liens against the property must be paid at closing to ensure the first position of your new lenders deed of trust. A title examination ensures that all recorded liens will be found, allowing us to collect for them, as well as to pay them off.

In some instances, the current liens are the expected deed of trusts, such as a first or second mortgage against the property.

Your current lender must provide a payoff. Some lenders will require a signed Release of Information from the borrower in order to provide the title company with this payoff.

You may be contacted to assist in obtaining a final payoff. Although rare, some lenders, contrary to the excepted practice and customary courtesies of most lenders today, will not cooperate in providing a third party with a payoff.

In those situations, you will be asked to contact the lender yourself, to ask for a payoff

Payoffs are different from the principal balance of a loan in that a payoff includes any prepayment penalties, interest, and fees. A final payoff is a requirement of closing. Payoffs are requested to be good for a minimum of 10 days past your closing date.

Any additional liens found recorded against the property will also need to be collected and paid at closing. Again, you may be asked to provide specific information about any lien, in order for a proper and final payoff of the lien be obtained.

A judgment search is also run for borrowers and sellers and any judgments that affect or could affect the title to the property will be collected and paid at closing.

Because Maryland does vest title to married couples as tenants by the entirety, some judgments against one spouse or the other will not attach. Any Federal tax lien will attach regardless.

In all other situations, judgments must be paid, with certain exceptions, such as the age of the judgment, or the type of judgment.

Wet Settlement Act:

The Wet Settlement Act applies to residential transactions on 1-4 family residences involving a mortgage, and requires that the lender provide “good funds” to the settlement agent at or before the closing, although the agent may not disburse prior to recording of the instruments, or with express approval by the parties providing the funds for the closing. Maryland is considered a “Wet Settlement” State.

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