Montgomery County Closing Tax Guide
Montgomery County Transfer and Recordation Taxes: What Buyers and Sellers Pay
The state and county taxes charged on a Montgomery County, Maryland home sale, how the tiered recordation tax works, and the breaks for owner-occupants and first-time buyers.
The short answerA Montgomery County, Maryland home sale carries three closing taxes: Maryland's 0.5% state transfer tax, the county's 1% transfer tax, and a county recordation tax charged in tiers from $4.45 to $11.35 per $500. Owner-occupants are exempt from recordation tax on the first $100,000. For first-time Maryland buyers, the state transfer tax drops to 0.25% and the seller pays it.
Source: Maryland Code, Tax-Property § 13-203; Montgomery County Code § 52-31 and § 52-16B.
What taxes are due when a Montgomery County home sells?
Three taxes are due when a Montgomery County home sells. Maryland charges a state transfer tax. Montgomery County charges its own transfer tax and a recordation tax.
| Tax | Rate | Set by |
|---|---|---|
| Maryland state transfer tax | 0.5% of the price | Tax-Property § 13-203 |
| Montgomery County transfer tax | 1% on an improved residential property sold for $70,000 or more | County Code § 52-31 |
| Montgomery County recordation tax | $4.45 to $11.35 per $500, in tiers | County Code § 52-16B |
Source: Maryland Code, Tax-Property § 13-203; Montgomery County Code § 52-31 and § 52-16B.
How is the Montgomery County recordation tax calculated?
The Montgomery County recordation tax is charged per $500 of the price, at a higher rate on each band of the price above $500,000. Each rate applies to the portion of the price inside its band. The current rates took effect on October 1, 2023, under County Bill 17-23.
| Portion of the price | Rate per $500 |
|---|---|
| Up to $500,000 | $4.45 |
| $500,000.01 to $600,000 | $6.75 |
| $600,000.01 to $750,000 | $10.20 |
| $750,000.01 to $1,000,000 | $10.78 |
| Over $1,000,000 | $11.35 |
The first $100,000 of the price is exempt when the buyer is an individual who will live in the home as a principal residence for at least 7 of the 12 months after closing.
Source: Montgomery County Code § 52-16B; Montgomery County Bill 17-23.
Who pays transfer and recordation taxes in Montgomery County?
The sales contract decides who pays, with one exception set by Maryland law. When the buyer is a first-time Maryland home buyer who will live in the home, the state transfer tax drops to 0.25% and the seller pays all of it. Montgomery County's own transfer and recordation taxes are set separately in the County Code.
Who counts as a first-time Maryland home buyer?
Under Tax-Property § 13-203, a first-time Maryland home buyer is an individual who has never owned residential real property in Maryland that was the individual's principal residence. The buyer must also occupy the home as a principal residence.
Source: Maryland Code, Tax-Property § 13-203(b).
What should buyers and sellers do before a Montgomery County closing?
- Read each band of the recordation tax against the price. The rate rises at $500,000, $600,000, $750,000 and $1,000,000.
- Buyers who will live in the home: confirm the $100,000 owner-occupant exemption is claimed.
- First-time Maryland buyers: confirm eligibility early. The state transfer tax then falls entirely on the seller.
- Set out in the sales contract who pays the county transfer and recordation taxes.
- Buying farmland? Read the Maryland agricultural use assessment guide. A separate agricultural transfer tax can apply.
Frequently Asked Questions
What is the transfer tax in Montgomery County, Maryland?
1% of the price on an improved residential property sold for $70,000 or more, plus Maryland's 0.5% state transfer tax. The county recordation tax is charged separately.
How much is the Montgomery County recordation tax?
$4.45 per $500 on the first $500,000 of the price, rising in steps to $11.35 per $500 on the portion above $1,000,000.
Do first-time buyers pay state transfer tax in Maryland?
No. For a first-time Maryland home buyer who will live in the home, the state transfer tax drops to 0.25% and the seller pays all of it.
Is there a recordation tax exemption for owner-occupants in Montgomery County?
Yes. The first $100,000 of the price is exempt for an individual buyer who will live in the home as a principal residence for at least 7 of the 12 months after closing.
When did the current Montgomery County recordation rates take effect?
October 1, 2023, under Montgomery County Bill 17-23.
Who decides who pays Montgomery County closing taxes?
The sales contract, except that Maryland law requires the seller to pay the entire state transfer tax when the buyer is a first-time Maryland home buyer.
Buying or Selling in Montgomery County?
FORWARD at Corcoran McEnearney advises buyers and sellers in Montgomery County and across Maryland. Marc Cashin and Cesar Rivera can walk through the closing taxes on a specific property before an offer is written.
Talk to an AdvisorMore guides: Montgomery County real estate guides · Closing taxes in DC, Maryland and Virginia compared · Montgomery County real estate · Bethesda, MD · All Resources
Sources: Maryland Code, Tax-Property § 13-203; Montgomery County Code § 52-16B; Montgomery County Code § 52-31; Montgomery County Bill 17-23. Updated November 2026. General information, not tax or legal advice. Confirm with the Montgomery County Department of Finance, a tax professional or an attorney before acting.