Title and settlement in Crofton, MD, and the Crofton district tax

Crofton pays county rates, plus one extra line

Crofton is not an incorporated town. There is no town government and no town property tax, so a Crofton home is taxed at Anne Arundel County rates: for FY2027 (July 1, 2026 - June 30, 2027), $0.968 county plus $0.112 state for each $100 of assessed value. Crofton also pays the county’s transfer and recordation tax rates, under the same rules on who pays them. The full county breakdown is in our Anne Arundel County closing costs guide.

What sets Crofton apart is the special district tax. Homes inside the Crofton Special Community Benefit District carry an extra charge on their county tax bill. A buyer who budgets only for the county and state rates may underestimate the monthly payment, and a seller who is asked about it late in the deal can lose time.

The Crofton district tax

The Crofton Special Community Benefit District is a special taxing area created under the special district provisions of the Anne Arundel County Code. The Crofton Civic Association’s board of directors runs it. According to the association, the district’s funds may be used for public safety, upkeep of community property, recreation programs and administration.

How much it is. Each year the County Council sets the rate in its levy ordinance for special districts. For FY2027 (July 1, 2026 - June 30, 2027), Bill 33-26 set the Crofton rate at $0.1086 per $100 of assessed value. Because it is a rate on value, not a flat fee, the charge rises and falls with the assessment. For a rough estimate, divide the assessed value by 100 and multiply by the district rate. The tax bill shows the actual charge.

The land loan. In 2021 the County Council passed Bill 51-21. It commits the county to levy the Crofton district tax, in each of up to 15 fiscal years, at a level high enough to repay a Severn Bank loan to the Crofton Civic Association for buying land on Crain Highway in Crofton. The county is not a guarantor of the loan, and the bill lets the county pay the district tax collected for the loan directly to the bank. For a buyer, this means part of the district tax goes to loan payments while the loan is being repaid.

The homestead cap may not limit it. For county tax, the homestead credit keeps the taxable assessment of a qualifying owner-occupied home from rising more than 2% a year. A 2014 Maryland Attorney General opinion concluded that the homestead credit does not apply to Anne Arundel’s special community benefit district taxes. If that view is followed, the Crofton rate is applied to the assessment without the cap, even when your county tax is capped. An Attorney General opinion is advice, not a court ruling, so check the charge on your own tax bill.

Not every Crofton address is in it. The district is a defined area. A 21114 ZIP code or a Crofton mailing address does not by itself put a home inside it. The Crofton Civic Association publishes a district map, and the current tax bill shows the charge if it applies. Ask the seller for the bill early; we confirm it from the tax records before settlement.

How the district tax is handled at settlement

Maryland property taxes run on the fiscal year, July 1 to June 30. The Crofton charge is billed and collected with the county property tax, so it is usually treated like the rest of that bill at settlement:

• Proration. Sales contracts usually adjust property taxes to the settlement date: the seller bears them up to that date and the buyer from it. If the seller has already paid the year’s bill, the buyer usually repays the seller for the part of the year after settlement. If the bill is being paid in installments, the adjustment allows for what has been paid and what is still due. Tax that is due and unpaid at settlement is usually paid from the settlement funds, with the seller’s share charged to the seller. The signed contract decides the details.
• Escrow. If the buyer’s lender holds a tax escrow, it should cover the whole bill, district charge included. Give your loan officer the current tax bill, not a figure based on the county rate alone.
• The first bill after you buy. The seller’s homestead credit does not pass to the buyer. State law requires the settlement agent to give you a copy of the SDAT homestead application at settlement, and SDAT also mails one after the deed is recorded. File it once the home is your main residence. Until your application is approved, the homestead cap does not limit your county and state tax.

Who pays transfer and recordation tax

Under Maryland law, the buyer and seller share the recordation tax and the state and county transfer taxes equally unless the contract says otherwise. The contract can change that split, so the signed contract decides.

At the county median price of $509,990 the taxes are $2,549.95 state transfer tax, $5,099.90 county transfer tax and $3,570 recordation tax. That makes $11,219.85, or about $5,609.92 each on an equal split. Type your own price into the calculator on our Anne Arundel County page to see your figures.

Three points change the numbers:

• First-time Maryland buyers. If each buyer on the deed is either a first-time Maryland buyer who will live in the home as a main residence or a co-signer of the purchase loan who will not, and each signs a sworn statement saying so, the state transfer tax is 0.25% of the price, paid entirely by the seller. The seller also pays the county transfer and recordation tax unless the contract expressly says otherwise. The first-time buyer option in the calculator on our Anne Arundel County page shows the difference.
• Higher-priced homes. The county transfer tax rate is 1.0% of the price up to $999,999.99; 1.5% of the whole price when the price is $1,000,000 or more.
• The purchase loan. The deed of trust for the loan that pays for the home is not subject to recordation tax, provided it is signed and recorded within the 30-day windows the statute sets.

These are government taxes only. The title insurance premium, settlement fee, lender charges and the tax and HOA adjustments come on top. For a full figure, get an instant quote.

Title issues we check on Crofton homes

• Homeowners and condominium associations. Dues and assessments are usually adjusted to the settlement date. A statement from the association shows whether anything is past due, so a balance can be paid from the seller’s proceeds.
• Deferred water and sewer charges. Anne Arundel County has let some older or disabled homeowners defer certain water and sewer connection charges and front foot benefit assessments. A deferred amount stays a lien on the property and is due when the home is sold or title is transferred. We ask for any payoff before settlement so it does not surprise the seller.
• Notices in the contract. Maryland sales contracts must carry the critical area notice and the military installation notice (Fort Meade is in Anne Arundel County). If the county or the State has started enforcement for certain local-law violations on the property, the contract must say so. Whether a lot is in the critical area is a map question, so we check rather than assume.
• Inherited homes. When an estate sells, the personal representative usually needs letters from the Register of Wills before settlement. For inherited property and transfers within a family, see our deeds and family transfers service.
• Fences, sheds and lot lines. Older plats and later additions do not always match what is on the ground. A survey can show where the lines are before settlement.
• Sellers who live out of state. Maryland withholds 8.75% of the total payment to the seller, meaning the net proceeds actually paid to the seller (nonresident individuals) unless an exemption applies. We work this out early so the seller knows the net figure.

An owner’s title insurance policy protects the buyer against covered title problems, including some that a search may not reveal. In Maryland an owner’s policy is optional; if you choose one, its premium is paid once, at settlement. Our page on why title insurance matters explains what it covers.

How Maryland First Title helps in Crofton

We are an attorney-led title and settlement company and have handled Maryland real estate settlements since 1994. Our office is at 306 Crain Hwy N in Glen Burnie. Our attorneys can meet you anywhere in Maryland for settlement at no extra cost, or you can settle at our office. Weekend and after-hours settlements are available by appointment.

We handle residential settlements for buyers, sellers, agents and lenders. If you are selling without a listing agent, see For Sale by Owner support.