Howard County closing costs: transfer tax, recordation tax and who pays

The short answer

Most Howard County settlements carry three government taxes, plus the usual title, settlement and lender charges. The estimator at the top of this page works out the taxes for your price, and each rate with its official source and an as-of date is under Facts and sources at the end of the page. Other counties are on our areas we serve page.

This guide covers who normally pays what, where the money goes, the tax bill adjustments and the title questions that come up in this county.

Splitting the costs between buyer and seller

Transfer and recordation taxes. Maryland law starts from an even split. Unless the contract says otherwise, the buyer and seller are presumed to share equally:

• the state transfer tax, 0.5% of the price;
• the Howard County transfer tax, 1.25% of the price (effective July 1, 2020);
• Howard County recordation tax, $2.50 per $500 of the price, about 0.50%. Any part of a $500 step counts as a full step, so the price is rounded up before the rate applies.

That even split is only the fallback. Whatever the signed contract says about these taxes wins.

First-time buyers. The picture changes when the buyer has never owned a Maryland home that was their main residence and will live in this one. It applies only to a home that is already built, not a vacant lot. Every buyer on the deed has to qualify, although a co-signer or guarantor on the purchase loan who will not live there does not spoil it. The state transfer tax then drops to 0.25% of the price, paid entirely by the seller. The seller also pays the county transfer tax and recordation tax, unless the contract expressly assigns them to the buyer. Each buyer on the deed signs a statement under oath. Sellers should know this before accepting an offer, because it moves thousands of dollars to their side. Who qualifies, and the fine print, is covered in our first-time buyer exemption guide.

Howard County police, fire and rescue, and teachers. Howard County’s own police officers, deputy sheriffs and fire and rescue members, and certificated teachers employed by the Howard County Board of Education, have their own break. Their first purchase of a home in Howard County is exempt from the county transfer tax. This is not the Maryland first-time buyer test, so owning a home somewhere else does not rule it out. The same law also limits the rate on a second or later Howard County purchase; how that limit applies at today’s county rate should be confirmed with the county’s Recordation Tax Office before settlement. At least one buyer who is not just a co-signer must live in the home and stay in the qualifying job for at least 3 years after buying; otherwise the tax that was waived has to be paid. The exemption form must be completed by the county’s Department of Human Resources or the Board of Education before the deed is presented to the county. Tell your agent and us when you sign the contract, so the paperwork is ready well before settlement.

Other transfers the county does not tax. Howard County transfer tax is also not charged on the sale of a moderate income housing unit, or on a transfer to the State or one of its agencies, a county, city or other political subdivision, a nonprofit hospital, or a religious or charitable organization.

Other charges. The contract also decides who pays the other costs. As general information, the buyer typically pays its lender’s charges and the cost of recording the deed and deed of trust, and the seller pays off its own mortgage and records the release of that loan. Title insurance and the settlement fee are often paid by the buyer, but the contract can say otherwise. Real estate commissions are paid as the listing agreement, any buyer agency agreement and the contract provide.

A lender requires its own title policy. An owner’s title policy is optional in Maryland; a buyer who chooses one pays a one-time premium at settlement. Why title insurance matters explains what it protects.

The purchase loan does not add a second recordation tax. The tax is charged on the price in the deed, and a deed of trust securing the purchase is exempt when it says so on its face, is signed within 30 days of the deed being signed and is recorded within 30 days after the deed is recorded.

Howard County transfer tax at the median price

The estimator opens at the Howard County median sale price for the year to June 2026, $640,500. That is the state’s figure for owner-occupied homes, based on 2,948 sales. At that price:

• Maryland transfer tax: $3,202.50
• Howard County transfer tax: $8,006.25
• county recordation tax: $3,202.50

Together that is $14,411.25. Split down the middle, buyer and seller each owe roughly $7,205.63. With a first-time buyer and a contract that says nothing different, the state tax falls to $1,601.25 and the seller pays all three.

The Howard County rates are the same at every price, so there is no higher tier for expensive homes.

These are taxes only. For a figure that includes title insurance, our fee and recording costs, use the instant quote.

Where the Howard County taxes are paid

Howard County collects its own taxes before a deed can be recorded:

1. County transfer tax and recordation tax are paid to the Howard County Director of Finance at the Recordation Tax Office, George Howard Building, 3430 Court House Drive, Ellicott City. The county has collected its share of the transfer tax this way, instead of through the Clerk, since July 1, 2019.
2. County obligations are checked. The office stamps the deed to show that county charges on the property have been satisfied. The county’s Statement of County Obligations for the property can be ordered online before settlement, so that an unpaid county charge can be found and dealt with at settlement.
3. The state transfer tax and recording fees are paid to the Clerk of the Circuit Court with the deed, and the deed is recorded by the Clerk’s Land Records and Licensing Department at 9250 Judicial Way in Ellicott City.

A deed that is missing a required form can be sent back unrecorded, so we check the forms before settlement.

Title issues we see in Howard County

Contract notices. Howard County has no Chesapeake Bay critical area land and is exempt from the military installation contract notice. Every Maryland sales contract still carries the standard critical area notice, but the critical area rules that shape many waterfront sales in Anne Arundel County do not apply to land here. Only the separate military installation notice is not required.

Farms under preservation easements. The county has preserved thousands of acres of farmland in the rural west. Most of it is under county easements, either bought through its Agricultural Land Preservation Program or dedicated when land was subdivided; some is under state (MALPF) easements. A county easement is permanent, stays with the land and binds every later owner. The farm can still be sold, but development is restricted, apart from any lot or dwelling rights the owner kept. If you are buying acreage, we read the recorded easement as part of the title work, so you can see what it allows while your contract deadlines are still open.

Wells and septic systems. Title work does not test a private well or septic system. If your lender or contract calls for a water test or septic inspection, the buyer usually arranges it. The Health Department’s Well and Septic Program reviews septic system designs, inspects wells and septic systems, tests private well water and offers a public file search for its records.

Estates and family transfers. When the seller has died, the personal representative appointed in the estate usually signs the deed, so the estate must be open and the appointment current. We check the will and the estate papers for any limit on the power to sell. Some heirs also owe Maryland inheritance tax: 10% on property passing to non-exempt heirs (for example nieces, nephews, cousins, friends). Our deeds and family transfers service covers transfers between relatives and out of estates.

Boundaries on older and rural lots. Older homes and rural parcels can be described by metes and bounds rather than a lot on a recorded plat. A fence, driveway or shed can then end up on the wrong side of the line without anyone noticing. Reading a survey against the deed and any plat can find the problem while it can still be negotiated.

Sellers who live out of state. If the seller is not a Maryland resident, part of the proceeds is withheld for Maryland income tax unless an exemption applies, such as a home that was the seller’s principal residence. The rate is 8.75% of the total payment to the seller, meaning the net proceeds actually paid to the seller (nonresident individuals), or 8.25% of the total payment (nonresident entities). The amount is withheld from the seller’s proceeds at settlement and paid to the state when the deed is recorded; our nonresident withholding guide explains how to reduce it or get it back.

Make sure the home is really in Howard County

The mailing address does not decide which county’s taxes apply. Some Laurel addresses fall outside the City of Laurel and sit in Prince George’s, Howard or Anne Arundel County, and each county has its own transfer and recordation rates. The Hanover ZIP code, 21076, also reaches into Howard County. Homes near the Patapsco River, around Elkridge and on the edges of Ellicott City can also sit close to a county line. The county is shown on the property’s SDAT Real Property Data Search record. Check it, or have us check it, while the contract is still being drafted; which Maryland county is my address in? shows how.

Working with Maryland First Title in Howard County

Our attorneys have handled Maryland title and settlement work since 1994. For a Howard County settlement we can come to you at no extra cost, whether you are in Columbia, Ellicott City, Elkridge or on a farm in the west of the county, meet online, or see you at our office at 306 Crain Hwy N in Glen Burnie. We handle residential settlements, commercial settlements, 1031 exchanges for investors, and sales where the seller has no agent or the buyer is buying without one.