Did you know that the bill to raise recordation taxes in Montgomery County passed this week?
May 20, 2016
Did you know… that the bill to raise recordation taxes in Montgomery County passed this week?
A couple of weeks ago, we wrote about a proposal to raise recordation taxes that was rapidly working its way through the legislative process in Montgomery County. This Wednesday, May 18, 2016, the bill passed unanimously. Here is what you need to know about the new recordation tax:
1) It applies to any transaction which occurs on or after September 1, 2016
2) Recordation taxes for owner-occupied property will be waived for the first $100,000 of the purchase price
a. This is an increase from the previous exemption for the first $50,000 of the purchase price
b. Example: If a buyer purchases a $450,000 home and will occupy the home as their principal residence, they will only pay recordation taxes on $350,000
3) Recordation taxes on the first $500,000 of the purchase price will increase by $2.00 per $1,000, raising the base tax from $6.90 per $1,000 to $8.90 per $1,000
4) Recordation taxes on the amount of the purchase price over $500,000 (the “premium tax”) will increase by $3.50 per $1,000, raising the premium tax from $10.00 per $1,000 to $13.50 per $1,000
What is the bottom-line result for buyers and sellers? Here are two examples of the increase in action after September 1, 2016:
Example 1: For an owner-occupied house that costs $450,000, the county recordation tax will increase from $2,760 to $3,115.
Example 2: For an owner-occupied house that costs $750,000, the county recordation tax will increase from $5,605 to $6,935.
For more information regarding residential real estate transactions in Maryland, DC, and Virginia, contact one of the attorneys listed here.
For more information regarding our Residential Real Estate Settlements Group or our general real estate transactions and litigation practice, please contact the Group Chair at 301-230-6574 or firstname.lastname@example.org.
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.