Title and settlement in Laurel, MD

The City of Laurel is a small city on the Patuxent River, and all of it lies in northern Prince George’s County. The “Laurel, MD” mailing address covers much more ground. It runs past the city line into unincorporated Prince George’s County and across the county lines into Anne Arundel and Howard. Two homes with the same town name on the envelope can pay different transfer taxes, get different property tax bills and have their deeds recorded at different courthouses.

This guide is for people buying or selling a Laurel home and the agents who work with them. Maryland First Title has handled settlements across Maryland from Glen Burnie since 1994, and we start where most Laurel questions start: the address itself.

Which Laurel is the home in?

Inside or outside the city? The City Limits and Addresses page on the city’s website has a boundary map and a Master Address List. The city puts it plainly: an address that is not on the list is not in the city. Homes inside the city pay city property tax, and the city, not the county, handles their zoning.

Which county? The seller’s tax bill names the county, and so does the property’s record on the SDAT Real Property search. Check it before the contract is written, because the county sets the transfer tax, the recordation tax and the courthouse. Our guide to which Maryland county an address is in explains why mailing addresses so often mislead.

We run the title search in the county where the land actually lies, so the tax lines on the settlement statement follow the land, not the envelope.

Transfer and recordation tax in each county

The state transfer tax is 0.5% of the price in every county, or 0.25% for a qualifying first-time Maryland buyer (see “Who pays” below). Each county then adds its own transfer tax and recordation tax:

Where the home is	County transfer tax	Recordation tax, per $500 of price	Deed recorded in
Prince George’s County, including all of the City of Laurel	1.4%	$2.75	Upper Marlboro
Anne Arundel County	1%, or 1.5% of the whole price at $1,000,000 or more	$3.50	Annapolis
Howard County	1.25%	$2.50	Ellicott City

Recordation tax is charged on each $500 of the price or any part of $500, so the price is rounded up to the next $500 first. The buyer’s purchase-money mortgage or deed of trust is generally not taxed again, as long as it meets the conditions in Maryland law: among other things, it must say on its face that it secures purchase money, and it must be signed and recorded close in time to the deed. We prepare the closing documents with this in mind.

Prince George’s figures at the median price

Take the county’s median sale price, $473,000. At that price, the state transfer tax is $2,365, the county transfer tax comes to $6,622 and recordation tax adds $2,601.50. That makes $11,588.50 in all, or $5,794.25 each when buyer and seller split it evenly. Type your own price into the calculator on our Prince George’s County page to see your numbers.

That example uses Prince George’s rates only. If the SDAT record puts the home in Anne Arundel or Howard County, use the rates in the table above, or ask us for a figure.

Who pays

When the contract says nothing about it, Maryland law presumes that buyer and seller split these taxes evenly. Many contracts change that, so check yours.

When the buyer has never owned a main home in Maryland and will live in this one, the state transfer tax drops to 0.25% of the price, paid entirely by the seller. Every buyer on the deed has to meet that test, except a loan co-signer who will not live in the home, and each gives a statement under oath. In that sale the county taxes also fall on the seller, unless the contract expressly says the buyer pays them. The calculator on our Prince George’s County page has a first-time buyer switch that shows the new shares.

The first-time buyer rate is a state rule. The county programs we know of are narrower, and they are for certain public employees:

• Howard County exempts the first Howard County home purchase of a Howard County police officer or deputy sheriff, a Howard County fire and rescue services member, or a teacher employed by the Howard County Board of Education, and limits the county rate on a later Howard purchase. This is not the Maryland first-time buyer test, so owning a home elsewhere does not rule you out. At least one qualifying buyer must live in the home and stay in the job for at least 3 years, or the waived tax has to be paid back. Howard County Human Resources or the Board of Education must complete the county form before the deed is presented.
• Prince George’s County has a transfer tax program for certain county public safety employees and teachers. Its conditions are set by county law and include staying in the job for a period of years, so ask us about the current terms.

If you think a county program might apply to you, tell us early, because the paperwork has to be ready before settlement.

These government taxes are only part of the bill. On top of them come the title insurance premium, our fee, lender costs, the Clerk’s recording charges, and the split of property tax and association dues for the year. Our instant quote shows the whole picture, and our Prince George’s County page goes deeper on that county.

Fort Meade and the notices in your contract

Fort George G. Meade, home to the National Security Agency, U.S. Cyber Command and the Defense Information Systems Agency, is one of Laurel’s neighbors. The state’s page on the base, citing the City of Laurel’s master plan, notes that a large share of Laurel residents work there.

The military installation notice. Maryland law requires a contract to sell a home in most counties, including Prince George’s and Anne Arundel, to tell the buyer that the property may be near a military installation that conducts flight operations, munitions testing or other noisy activity. Where a local law requires a substantially similar notice, the local version takes precedence. Howard is one of the counties the state rule leaves out.

The critical area notice. Every Maryland sales contract must also carry the Chesapeake and Atlantic Coastal Bays critical area notice. As the notice describes it, the critical area is generally land and water within 1,000 feet beyond the landward edge of tidal waters and wetlands, plus the tidal waters and the land under them. Howard County has no critical area land.

Buyers on orders. If you have a fixed report date, give it to us with the title order. A buyer who cannot attend may be able to sign by power of attorney. Lenders and title insurers often want to review a power of attorney before settlement, so send it to us as early as you can.

Sellers who have moved away. When a seller who is an individual is no longer a Maryland resident, 8.75% of the net proceeds paid to that seller is withheld at settlement and sent to the Comptroller, unless an exemption in the law applies. One way to reduce or avoid the withholding is a Comptroller certificate of full or partial exemption. The application form (MW506AE) lists the grounds, including the sale of a principal residence, and it must reach the Comptroller by a deadline before closing that the form sets, so start early. Our guide to buying a home near Fort Meade compares the communities around the base.

Title issues we look for around Laurel

Associations. Condominium and homeowners association sales come with resale documents the seller must deliver, and the law then gives the buyer a limited time to cancel. We ask the association for an account statement so any unpaid dues can be paid from the seller’s proceeds at settlement.

Water, sewer and impact fees in Prince George’s. For the initial sale of a home with deferred private water and sewer assessments recorded by a covenant or declaration, the contract must disclose them, including the annual amount, the payments and balance remaining, and the payoff amount. A contract for property with a development impact fee must state the fee, the total and any unpaid amount. If you are buying new construction, make sure any required notices are in the contract before you sign.

Older lots. Where a lot was laid out on an old plat, the deed description may not match the fences, sheds or driveways on the ground. A survey can show a problem while there is still time to fix it. An owner’s title policy is optional in Maryland. It protects against covered title defects the search did not find, and its premium is paid once, at settlement.

Wells and septic systems. If a home is on a private well or septic system rather than public water and sewer, the lender may ask for a water test, and the contract may make the sale depend on an inspection.

Inherited homes. If the owner has died, the seller is normally the estate’s personal representative, and the estate is opened through the county’s Register of Wills. Our deeds and family transfers service handles these sales.

Recording at the right Circuit Court

After settlement the transfer and recordation taxes are paid and the deed is recorded in the county where the land lies:

• Prince George’s County: Clerk of the Circuit Court for Prince George's County, Land Records Division, Judicial Administrative Services building, 14701 Gov. Oden Bowie Drive, Upper Marlboro, MD 20772 (mailing: 14735 Main Street, Upper Marlboro, MD 20772).
• Anne Arundel County: the county transfer and recordation taxes are paid to Anne Arundel County at a county Cashier’s Office, and the deed is recorded by the Clerk of the Circuit Court for Anne Arundel County, Land Records Department, in Annapolis.
• Howard County: the county transfer and recordation taxes go to the Recordation Tax Office of the Howard County Department of Finance, not to the Clerk. The state transfer tax and recording fees are paid to the Clerk with the deed, which is recorded by the Clerk of the Circuit Court for Howard County, Land Records and Licensing Department, in Ellicott City.

Recording in the right county puts the buyer’s ownership on the public record, so we confirm the county before anything is sent.

Settling a Laurel home with us

We handle title and settlement across Maryland, and Laurel buyers and sellers do not have to make the drive to Glen Burnie: our attorney settlement agents can meet you in Laurel at no extra cost. You are also welcome at our office at 306 Crain Hwy N in Glen Burnie, and weekend and after-hours settlements are available by appointment. Besides residential settlements for purchases, sales and refinances, we help owners who sell their own home and buyers who have no agent. Call (410) 768-2300 or start with an instant quote.