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Higher Recordation Tax Proposed in
Montgomery County

by Tom Branham, Washington D.C., May 2016

 

Property owners in Montgomery County, Maryland are already facing a possible increase in property taxes. Now they face higher recordation taxes when they sell or refinance their property as well.

 

Expedited Bill 15-16 would increase the rate of the recordation tax and allocate the revenue to different uses.

 

Under the bill, the base recordation rate would remain unchanged. However, the School Increment and the Recordation Tax Premium would increase as follows:

 

  • The School Increment would increase from $1.25/$500 to $2.00/$500. This increase is expected to generate $125 million over the next six years for the Montgomery County Public Schools.

  • The Recordation Tax Premium, which only applied to property sales and refinancing in excess of $500,000, would increase from $1.55/$500 to $2.30/$500. This would generate $30 million for county government projects and $30 million for rental assistance programs.

A public hearing is scheduled May 10 on Expedited Bill 15-16. If approved by the Montgomery County Council, the higher recordation fees would go into effect July 1, 2016.

 

 

Total Recordation Tax for Real Property

Property Value

Tax at Current Rates

Tax at Proposed Rates

$1,500,000

$13,105

$16,780

$1,400,000

$12,105

$15,480

$1,300,000

$11,105

$14,180

$1,200,000

$10,105

$12,880

$1,100,000

$9,105

$11,580

$1,000,000

$8,105

$10,280