What is the Maryland transfer tax rate?
The state transfer tax is 0.5% of the consideration payable for the deed, under Tax-Property Article §13-203(a). Consideration includes any mortgage or deed of trust the buyer assumes. It doesn’t include debt that’s forgiven or no longer secured by the property.
A reduced 0.25% rate applies only to a first-time Maryland home buyer purchasing improved residential property as a principal residence, and in that case the seller pays the whole tax. An investor buying a five-unit or larger apartment building doesn’t qualify, so the full 0.5% applies to every apartment sale covered on this page.
The state rate is the smallest of the three layers in many counties. To estimate what a Maryland deed will really cost, add the county transfer tax and the county recordation tax to the state’s 0.5%.
County transfer and recordation taxes
Counties add two more taxes. The county transfer tax is a percentage of the consideration, and it ranges from zero in Calvert, Carroll, Frederick, Somerset and Wicomico counties to 1.5% in Baltimore City and Baltimore County. The recordation tax is charged in dollars per $500 of consideration, from $2.50 in Baltimore County and Howard County to $7.00 in Frederick and Charles counties, according to the Department of Legislative Services’ FY 2026 table.
Two counties use more complex structures. Anne Arundel County’s transfer tax is 1.0%, with a 0.5% surcharge on transactions of $1,000,000 or more. Montgomery County sets transfer tax rates that vary with the value of the property and applies a recordation tax surcharge on transactions above $500,000. For a sale in either county, get the figure from your title company rather than a flat percentage.
To turn a recordation rate into a percentage, divide by 500. Baltimore City’s $5.00 per $500 is 1.0% of the price. Charles County raised its recordation rate from $5.00 to $7.00 per $500 for FY 2026, which shows the rates do move.
| County | Recordation tax per $500 (FY 2026) | County transfer tax | Combined with 0.5% state tax |
|---|---|---|---|
| Baltimore City | $5.00 | 1.5% | 3.0% |
| Baltimore County | $2.50 | 1.5% | 2.5% |
| Prince George’s | $2.75 | 1.4% | 2.45% |
| Charles | $7.00 | 0.5% | 2.4% |
| Howard | $2.50 | 1.25% | 2.25% |
| Frederick | $7.00 | 0% | 1.9% |
| Carroll | $6.50 | 0% | 1.8% |
Who pays transfer and recordation tax in Maryland?
The contract decides. §13-203 doesn’t assign the standard 0.5% to the buyer or the seller; it names a payer only for the first-time buyer rate, which falls entirely on the seller. Splitting the state and county taxes equally between buyer and seller is a common starting point in Maryland contracts, but on an apartment sale every line is negotiable.
Agree on the split in the purchase contract and make it explicit for each tax. On a Baltimore City sale at $2,000,000, the difference between paying half and paying all of the taxes is $30,000.
Selling the entity: Maryland’s controlling-interest rule
Maryland taxes the sale of a controlling interest in a real property entity as if the real estate itself were deeded. Under Tax-Property §13-103(b), the state and county transfer taxes apply, and §12-117 applies the recordation tax.
Two thresholds both have to be met. A controlling interest means more than 80% of the stock value of a corporation, or more than 80% of the capital and profits interest in a partnership, LLC or other unincorporated business, or of the beneficial interest in a trust. A real property entity is one whose real property makes up at least 80% of the value of its assets and is worth at least $1,000,000, counted without subtracting mortgages.
The tax base is the consideration for the interest, including the entity’s mortgages, liens and other debts, minus the share allocable to assets other than real property. The entity must file a report within 30 days after the final transfer with a $20 filing fee and the tax due. The tax, interest and penalty are an obligation of the entity, so a buyer of the interests inherits the exposure if the seller skips the filing. Unpaid tax after 30 days draws interest at 1% a month and a 10% penalty.
Exemptions that matter to Maryland apartment owners
§13-207 exempts a deed from the state transfer tax to the extent it is exempt from recordation tax under listed parts of §12-108. The ones investors use most:
- Transfers between a parent business entity and its wholly owned subsidiary, or between subsidiaries of the same parent, for no or nominal consideration or only ownership interests, under conditions in §12-108(p).
- Transfers from a corporation, LLC or partnership on its liquidation, dissolution or termination to original owners or certain relatives, under §12-108(q).
- Conversions from a partnership or other predecessor entity to an LLC with the same owners in the same proportions, under §12-108(y), and transfers of a real estate enterprise to a single LLC under §12-108(bb).
- Mergers and consolidations, under §12-108(v) and (w).
- Transfers between spouses or domestic partners and between certain relatives, under §12-108(c) and (d).
- Transfers from an estate, and some transfers to or from trusts, under §12-108(dd) and (ee).
1031 exchanges and foreclosures
A 1031 exchange isn’t exempt from Maryland transfer or recordation tax. The relinquished property is deeded to a buyer for full consideration, and all three taxes apply on that deed. When the replacement property is in Maryland too, its deed is taxed again on the purchase. The exchange defers income tax on your gain; it does nothing for the closing taxes.
The exemption list in §13-207 doesn’t include a general exemption for foreclosure deeds or deeds in lieu of foreclosure, unlike Kentucky or Maine. If a lender is taking a building back from you, have the title company handling the deed confirm how the county will tax that specific instrument before you sign it.
Worked example: Maryland transfer tax on a Baltimore City sale
Take a 30-unit building in Baltimore City sold for $2,000,000 and a 75-unit complex in the city sold for $5,000,000.
For the $2,000,000 sale: the state transfer tax at 0.5% is $10,000. Baltimore City’s transfer tax at 1.5% is $30,000. The recordation tax at $5.00 per $500 is 4,000 units × $5.00 = $20,000. The total is $60,000, or 3.0% of the price. Split equally, each side would pay $30,000.
For the $5,000,000 sale: the state tax is $25,000, the city transfer tax $75,000 and the recordation tax $50,000, for a total of $150,000. The same $2,000,000 sale in Prince George’s County would carry $10,000 state tax, $28,000 county transfer tax at 1.4% and $11,000 recordation tax at $2.75 per $500, or $49,000 in total. Have your title company confirm each line against the county’s current rates before closing.
| Line item | Baltimore City, $2,000,000 | Baltimore City, $5,000,000 | Prince George’s, $2,000,000 |
|---|---|---|---|
| State transfer tax, 0.5% | $10,000 | $25,000 | $10,000 |
| County or city transfer tax | $30,000 | $75,000 | $28,000 |
| Recordation tax | $20,000 | $50,000 | $11,000 |
| Total | $60,000 | $150,000 | $49,000 |
| Share of price | 3.0% | 3.0% | 2.45% |
Maryland compared with neighboring states
Maryland’s 0.5% state rate looks low next to Delaware and Pennsylvania, but the county layers change the comparison. A Baltimore City sale at 3.0% all-in costs more than a Virginia sale and less than a Delaware one. Pennsylvania adds local transfer tax to its 1% state rate in most places, and West Virginia adds a county tax to its state tax.
| State | State-level tax on a deed | State tax on a $2,000,000 sale |
|---|---|---|
| Maryland | 0.5% transfer tax, plus county transfer and recordation taxes | $10,000 |
| Virginia | 25 cents per $100 recordation tax plus 50 cents per $500 grantor tax | $5,000 plus $2,000 |
| West Virginia | $1.10 per $500, plus county tax | $4,400 |
| Pennsylvania | 1% realty transfer tax, plus local tax | $20,000 |
| Delaware | 2.5% where the full 1.5% local tax applies, otherwise 3%, split equally | $50,000 or $60,000 |
Nonresident withholding and Maryland’s capital gains surtax
If you don’t live in Maryland, tax must be withheld from your sale proceeds and paid when the deed is recorded. After June 30, 2025, the rate is 8.75% of the total payment for nonresident individuals and 8.25% for nonresident entities, according to the Comptroller, after the Budget Reconciliation and Financing Act of 2025 raised the top state income tax rate. It’s a prepayment against your Maryland income tax, not an extra tax, but on a $2,000,000 sale by a nonresident individual it ties up $175,000 until you file.
The same 2025 law added a 2% tax on net capital gain for individuals with federal adjusted gross income over $350,000, starting with tax year 2025. The Comptroller’s Technical Bulletin 58 says real estate gains are generally included; the main real estate exclusion is a primary residence sold for less than $1,500,000. Gains deferred under Section 1031 aren’t in federal AGI, so they aren’t hit.
Put together with federal capital gains tax and depreciation recapture, these income taxes usually exceed the transfer and recordation taxes. That is why a 1031 exchange or an installment sale often matters more to a Maryland seller than the county where the building sits.
Selling your Maryland apartment building to Skyline
Skyline buys apartment buildings with five or more units across Maryland, including Baltimore City, Baltimore County, Prince George’s, Anne Arundel, Frederick and Hagerstown. We buy directly, can offer seller-carry terms when spreading out the gain helps, and work within 1031 deadlines if you’re exchanging.
Send the address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours, and our offer spells out how the state, county and recordation taxes are split.
