Queen Anne's County closing costs: transfer tax, recordation tax and who pays

This page covers a home sale in Queen Anne’s County. For other parts of Maryland, see the areas we serve.

The three taxes on a Queen Anne’s County sale

When a home changes hands in Queen Anne’s County, three government taxes are normally due on the price before the deed can be recorded:

• 0.5%State transfer tax0.5% of the price.
• 0.5%County transfer tax0.5% of the price.
• $4.95 per $500Recordation tax$4.95 per $500 of the price, about 0.99%. State law charges it on each $500 or fraction of $500, so the price is rounded up to the next $500 before the rate is applied.

The county’s rates are the same everywhere in the county, whether the house is in Stevensville, Grasonville, Centreville or out on a farm road. One local point stands out: the county’s published tax rates list a county transfer tax for first-time Maryland home buyers at half the usual rate. More on that below.

Your purchase loan does not usually add to this bill. Maryland exempts a buyer’s purchase-money mortgage or deed of trust from recordation tax when it is part of the same purchase and is signed and recorded within the time limits the statute sets. A later refinance or home equity loan follows different rules.

First-time buyers: lower rates, and the seller pays

Under state law, you are a first-time Maryland home buyer if you have never owned a home in Maryland that was your principal residence. The reduced state rate applies only when you are buying an improved home to live in as your principal residence. If more than one person takes title, each must qualify, apart from a co-signer or guarantor on the purchase loan who will not live there, and each person taking title signs a sworn statement saying which of the two they are.

Two rates change for that buyer:

1. The state transfer tax falls to 0.25%, under state law.
2. The county transfer tax is listed at 0.25% in the county’s published tax rates, for first-time Maryland home buyers who will live in the home as their principal residence. The county page does not spell out every condition, so ask us to confirm that your purchase qualifies.

Using both reduced rates at the median price, each transfer tax comes to $1,368.75, so the two together cost $2,737.50, the same as one of them at the ordinary rate. The county’s published rates list no first-time buyer reduction for recordation tax, so this example assumes the full rate; we will confirm the figures for your purchase.

The split changes as well. Under state law, the seller pays the whole state transfer tax in a sale to a qualifying first-time buyer. The law also presumes that the seller pays the county transfer tax and the recordation tax, unless the contract expressly says otherwise. So where the contract says nothing on the point, the first-time buyer generally owes none of these three taxes.

For sellers, this matters when comparing offers. Two offers at the same price can leave you with different amounts if one buyer qualifies as first-time. Check the tax clause in the contract, and ask us to run the figures before you accept. Tick the first-time buyer box in the estimator above to see the change. Our guide to the Maryland first-time buyer transfer tax exemption covers the rules in more detail.

How a deed gets recorded in Queen Anne’s County

Before any deed that transfers title goes to the Clerk, the county’s Office of Budget and Finance, Treasury Division, in Centreville reviews it and stamps it. It checks that the real estate taxes, utility and sanitary bills and any special assessments on the property are paid. A deed is not stamped until they are.

• Homes inside an incorporated town need the town’s stamp first.
• Agricultural property must be seen by the State Department of Assessments and Taxation before the county will stamp the deed.
• Deeds of trust (the buyer’s loan documents) skip this step and go straight to the Clerk.

The county also issues lien certificates showing what is owed on a property. It asks you to allow three to five business days, so it is worth ordering one early. Deeds can be sent for review and stamping electronically or by mail. Once stamped, the deed is recorded with the Clerk of the Circuit Court for Queen Anne's County, Land Records and Licensing Department, Courthouse, 200 North Commerce St., Centreville, MD 21617.

Local title issues worth checking early

Waterfront and the critical area. Every Maryland contract for the sale of real property must include the Chesapeake and Atlantic Coastal Bays Critical Area notice. The critical area generally takes in land within 1,000 feet of tidal water and tidal wetlands, so it reaches well beyond lots on the shore. Inside it, clearing and building are restricted, most of all close to the water. Ask the seller for permits for any pier, bulkhead, deck or addition, because problems with past work can become the new owner’s problems.

Flooding on Kent Island. The county's March 2016 sea level rise assessment flags MD 8 near Broad Creek, where storm surge (and, by 2100, higher tides) can cut off southern Kent Island. Low-lying lots along the county’s rivers and creeks raise the same questions. Check the FEMA flood map for the address and get an insurance quote while you can still act under the contract. If the home is in a high-risk flood zone, a lender will usually require flood insurance. Our Kent Island guide covers flood checks in more depth.

Farmland. A separate state agricultural land transfer tax can apply when farmland is sold, at rates well above the ordinary taxes. One exemption applies when the buyer files a declaration of intent, before the transfer, to keep the land in farm use for at least five full consecutive tax years, and applies for the farm use assessment. If the declaration covers only part of the land, the tax is due on the rest. If land later leaves farm use while the declaration is in force, the tax comes due on that land with a 10% penalty. If you are buying acreage, raise this before you sign.

Well and septic. Homes away from public water and sewer rely on a private well and septic system. A title search does not tell you whether they work. A lender may ask for a water test, and you may want a septic inspection as a condition in the contract.

Old deeds and family land. Rural parcels are often described by old landmarks, and their lines may not match today’s fences or lanes. A survey can show this before it turns into a dispute; our post on boundary disputes has more. When heirs sell land, the person signing for the estate must have authority to sell it. Our deeds and family transfers service can help.

Sellers living outside Maryland. Unless an exemption applies, tax is withheld at settlement from a nonresident seller’s proceeds: 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). One exemption is the seller’s certification, under penalty of perjury, that the home was their principal residence. Tell us at the start so the forms are ready.

How Maryland First Title helps

Since 1994, Maryland real estate attorneys have led the title and escrow work at Maryland First Title, and we handle settlements across the state. For a Queen Anne’s County settlement, our attorneys can meet you where it suits you at no extra cost, or you can come to our Glen Burnie office on the western shore of the Bay. Weekend and after-hours settlements are available by appointment. We handle the title search, title insurance, escrow, the county stamp and the recording. See our residential settlement service, for sale by owner support, or 1031 exchanges if you are selling an investment property.