Updated recordation and transfer tax guide is released for MD

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Now there is a new and updated guide to assist people who transfer or finance real estate in Maryland through the maze of recordation and transfer taxes.

Maryland recording taxes are complicated. Depending on the type of transaction, the location of the property, and the amount of money involved, as many as four different recording taxes may apply – the recordation tax (a Maryland state tax imposed at the rate set by each individual jurisdiction), the state transfer tax, local transfer tax (each jurisdiction may impose its own transfer tax and set its own rate, and most of them do), and the Baltimore City yield tax (applicable for transactions over $1,000,000). Certain of these taxes (the recordation tax and in some cases the Baltimore City yield tax) are applicable to documents conveying title (such as deeds, contracts, leases, and assignments) as well as to security instruments (including mortgages and deeds of trust). The state transfer tax is applicable only to documents conveying title. To confuse matters more, in Prince George’s County, the local transfer tax, which in other jurisdictions is applicable only to documents conveying title, is also applicable to security instruments.

Also, articles of merger, articles of consolidation, and articles of transfer may be subject to recording taxes.

Not all instruments that are recorded in the land records trigger these taxes because there are a number of exemptions from recording taxes. There are 40 exemptions from the recordation tax alone. If a particular exemption applies, the recording taxes may be reduced or even eliminated. Also, in most cases, if there is no consideration, there is no tax.

Recording taxes may be expensive. In some cases, the recording taxes total 3.75% of the amount of a transaction in Baltimore City, and the marginal rate of the recording taxes may total 3.77% of the purchase price of real property in Montgomery County.

Given all of this, the importance of a guide to recording taxes is apparent. In the early 2000s, lawyers in the Attorney General’s Office who represented the clerks of the courts prepared the 2002 Recording Seminar (by Julia Freit Andrew) and the 2004 Land Records Seminar (by Bruce L. Benshoof) to explain recordation and transfer taxes in Maryland and to describe how and when the taxes are applicable and when exemptions may apply to them. These works contain citations to and quotations from statutes, caselaw, opinions of the Attorney General’s office, and letters of advice from the Attorney General’s office.

The 2002 and 2004 papers were arranged by type of recording tax, with sections devoted to tax rates, calculations of the taxes, treatment of instruments executed in connection with different types of situations, application of the taxes to different instruments, exemptions from the taxes, and apportionment of taxes when some but not all of the subject property is in Maryland or when property is located in different jurisdictions in this state.

As more than 20 years have passed since these papers were initially released, John P. (Jack) Machen, Special Chief Solicitor of the Baltimore City Law Department, undertook to update them. Jack’s work product is the Maryland Recordation and Transfer Tax Guide 2025. (I provided input and advice to Jack on this project.)

The new guide revises and consolidates the two prior ones, and it updates some older provisions with new information. Among other things, the new guide includes material on the following changes to recording taxes that have occurred within the past 20 years:

1. The General Assembly passed legislation that became effective in 2008 to tax transfers of controlling interests (more than 80% of the equity interests) in Maryland real property entities under certain circumstances.

2. The General Assembly passed a bill in 2012 that limited the recordation tax benefits of indemnity mortgages and indemnity deeds of trust to cases when IDOTs are used in loans of less than $1,000,000, later raised to $3,000,000 in 2013 and to $12,500,000 in 2024.

3. In 2013, the General Assembly added taxpayer-friendly amendments to the supplemental instrument exemption and extended the refinance exemption from only residential mortgages to all mortgages.

4. The Baltimore City Yield Tax, which is added to the Baltimore City recordation and transfer taxes in cases where a transaction exceeds $1,000,000, became effective in 2019.

Additionally, an appendix to the new guide (which I prepared) uses charts to show the applicable recordation and transfer taxes in Baltimore City and each of Maryland’s 23 counties as of October 1, 2025.

To make the new version of the guide readily available, the Maryland State Bar Association’s Real Property Section has posted it on its website under Resources, with a direct link at Maryland Recordation and Transfer Tax Guide JPM-EJL 11-06-25 (2).pdf.

Edward J. Levin is a Member of the Real Estate Practice Group at Gordon Feinblatt, LLC.  He can be reached at 410-576-1900 or [email protected].