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Estimate title costs for Virginia, Maryland, or Washington DC.
Estimate Title Costs →Maryland has the biggest first-time homebuyer break on closing taxes: the buyer pays no state transfer tax, and by default the seller pays the county taxes too. DC cuts the buyer's recordation tax to 0.725%, about half the normal rate. Virginia has no first-time break on its recordation or grantor tax; its first-time help is a savings account with a state income-tax benefit instead.
The three side by side
| Jurisdiction | What a first-time buyer gets | Main conditions |
|---|---|---|
| Maryland | No state transfer tax for the buyer; the seller pays a halved 0.25% rate. County transfer and recordation tax shift to the seller by default. | Never owned and lived in a Maryland home; will live in this one; every buyer on the deed qualifies; sworn statement at closing |
| Washington, DC | Recordation tax at 0.725% instead of 1.1% or 1.45% | First-time DC homebuyer and DC resident; household income at or below 180% of Area Median Income; under the yearly price cap; homestead deduction application |
| Virginia | No reduction in recordation or grantor tax | A first-time home buyer savings account can lower state income tax |
What it saves on a $600,000 home
| Jurisdiction | Buyer's taxes, standard | Buyer's taxes, first-time |
|---|---|---|
| Montgomery County, MD | $6,725 | $0 if the contract keeps the state-law defaults |
| Washington, DC | $8,700 | $4,350 |
| Fairfax County, VA (with a $480,000 loan) | $3,596 | $3,596 |
Maryland
Under Maryland law, a qualifying first-time Maryland homebuyer pays no state transfer tax. The rate is halved to 0.25% and paid entirely by the seller (Tax–Property § 13-203(b); Real Property § 14-104(c)(2)). That part cannot be changed by contract.
The county transfer tax and recordation tax are not reduced, but they also go to the seller by default, "unless there is an express agreement" otherwise (Real Property § 14-104(c)(1)). Read that paragraph of your contract before you sign. Full details: Maryland first-time homebuyer transfer tax exemption.
Washington, DC
A qualifying first-time DC homebuyer pays recordation tax at 0.725% instead of 1.1% or 1.45% (D.C. Code § 42-1103(e)). It is a reduced rate, not an exemption. DC's Office of Tax and Revenue sets the purchase-price cap each fiscal year, so check the current figure. A separate, stricter program, the Lower Income Homeownership exemption (D.C. Code § 47-3503), removes recordation and transfer tax entirely for households that qualify. Full details: DC first-time homebuyer recordation tax.
Virginia
Virginia's recordation and grantor taxes have no first-time homebuyer exemption (Va. Code, Title 58.1, Chapter 8). Virginia's first-time benefit is the first-time home buyer savings account: money saved in one for a down payment and closing costs can be subtracted from Virginia taxable income, subject to the account rules (Va. Code § 58.1-322.02; accounts under Va. Code § 36-171 et seq.). Virginia's closing taxes are already the lowest of the three, so a Virginia buyer often pays less at closing than a first-time DC buyer even without a break.
Frequently Asked Questions
Does Virginia have a first-time homebuyer tax exemption at closing?
No. Virginia's recordation and grantor taxes have no first-time homebuyer exemption. Virginia's first-time benefit is a savings account whose contributions and earnings can be subtracted from state taxable income, subject to the account rules.
Do first-time buyers pay transfer tax in Maryland?
No state transfer tax. A qualifying first-time Maryland homebuyer pays none, and the seller pays a halved 0.25% rate. The county transfer tax and recordation tax go to the seller by default unless the contract expressly says otherwise.
What is the DC first-time homebuyer recordation tax rate?
0.725%, instead of 1.1% below $400,000 or 1.45% at $400,000 or more. The buyer must be a first-time DC homebuyer and resident, meet the 180% of Area Median Income limit, buy under the yearly price cap and apply for the homestead deduction.
Where do first-time buyers save the most on closing taxes?
Maryland, if the contract keeps the state-law defaults: the buyer can pay no transfer or recordation tax at all. In DC the buyer's recordation tax is roughly halved. Virginia has no first-time break, but its closing taxes are lower to begin with.
General information about title insurance and closing costs in Virginia, Maryland and DC, not legal or tax advice. Tax rates, fees and rules change, so confirm the figures for your own transaction.
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