Maryland Closing Costs Guide
Complete guide to closing costs in Maryland. Learn what to expect as a buyer or seller, including transfer taxes, recordation fees, and title insurance in the Free State.
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Local insight
Maryland closing costs can vary materially by county and transaction. This guide helps buyers identify county-sensitive questions before signing; verify current rates with official sources. Your lender and Pruitt Title's quote set the actual charges, and your Closing Disclosure governs.
What Buyers Pay in Maryland
Maryland buyers typically pay 3% to 5% of the purchase price in closing costs, in addition to their down payment. These costs include:
- Recordation Tax: Set by each county and charged on the purchase price—Montgomery County is $8.90 per $1,000 on the first $500,000, with the first $100,000 exempt for a principal residence
- State Transfer Tax: 0.5% of purchase price (0.25%, paid by the seller, for qualifying first-time Maryland homebuyers)
- County Transfer Tax: Varies by county—from none in Frederick County to 1.4% in Prince George's County (1.5% in Anne Arundel County at $1 million or more)
- Title Insurance: Owner's and lender's title insurance premiums
- Attorney/Settlement Fees: Typically $500-1,000 for closing services
- Survey and Inspection Fees: Varies by transaction
- Prorated Property Taxes: Property taxes from closing date through end of year
- Recording Fees: Small fees to record the deed and mortgage
Example: For a $500,000 home in Montgomery County with 20% down, buyer closing costs would be approximately $12,000-18,000.
What Sellers Pay in Maryland
Maryland sellers typically pay 1% to 3% of the sale price in closing costs (excluding real estate commissions). These costs include:
- Real Estate Commission: Typically 5-6% of the sale price (negotiable)
- State Transfer Tax: 0.5% of purchase price
- County Transfer Tax: Varies by county—Montgomery County is 1.0%
- Prorated Property Taxes: Property taxes from January 1 to closing date
- Outstanding Liens: Any liens on the property must be paid at closing
- Attorney Fees: If seller uses an attorney for the transaction
- HOA Fees: Any outstanding homeowners association dues
Example: For a $500,000 home in Montgomery County with a 6% commission, seller closing costs would be approximately $30,000-35,000.
Maryland Transfer & Recordation Taxes by County
| County | State Transfer | County Transfer | Total Transfer |
|---|---|---|---|
| Montgomery County | 0.5% | 1.0% | 1.5% |
| Prince George's County | 0.5% | 1.4% | 1.9% |
| Howard County | 0.5% | 1.25% | 1.75% |
| Anne Arundel County | 0.5% | 1.0% (1.5% at $1M+) | 1.5% (2.0% at $1M+) |
| Frederick County | 0.5% | None | 0.5% |
Note: These rates are subject to change. First-time Maryland homebuyers pay no state transfer tax; county-level exemptions are narrow (Prince George's and Howard counties exempt certain teachers, police and fire/rescue members). Consult with your title company for current rates.
Title Insurance in Maryland
Maryland requires attorney or licensed title agent involvement at closing. Title insurance protects against hidden title defects that could affect your ownership rights.
Owner's Title Insurance
Owner's title insurance protects your investment against claims against your ownership of the property. It's a one-time premium paid at closing and provides coverage for as long as you own the property. For a $500,000 home, a standard owner's policy is $2,507.50 in Stewart Title's published Maryland schedule, before discounts. Other underwriters' rates differ.
Lender's Title Insurance
Most lenders require lender's title insurance (also called a loan policy) to protect their interest in the property. This is typically a separate policy from the owner's coverage.
Simultaneous Issue Discount
When the owner's and lender's policies are issued together, the lender's policy is heavily discounted. In Stewart Title's published Maryland schedule it becomes a flat $350, up to the amount of the owner's policy.
Frequently Asked Questions
How much are closing costs in Maryland?
Maryland closing costs typically range from 3% to 5% of the purchase price for buyers and 1% to 3% for sellers. This includes transfer taxes, recordation taxes, title insurance, and various other fees. The exact amount depends on the purchase price, county, and whether you're buying or selling.
Who pays transfer taxes in Maryland?
In Maryland, transfer taxes are generally split between buyer and seller, but this can be negotiated in the contract. The state transfer tax is 0.5% of the price, and county transfer taxes vary by jurisdiction—Montgomery County charges 1.0%, while Prince George's County charges 1.4%.
What is the recordation tax in Maryland?
Maryland has no statewide recordation tax rate: each county sets its own, charged on the purchase price rather than the loan, and a purchase-money mortgage recorded with the deed is not taxed separately. Montgomery County charges $4.45 per $500 ($8.90 per $1,000) on the first $500,000, with higher rates above that, and the first $100,000 is exempt for a principal residence. Unless the contract says otherwise, Maryland law presumes the buyer and seller split recordation and transfer taxes equally.
Are there any exemptions from Maryland transfer taxes?
Yes. First-time Maryland homebuyers buying a principal residence pay no state transfer tax: the rate drops to 0.25% and the seller pays it. By default the seller also pays the recordation and county transfer taxes, unless the contract says otherwise. There are also exemptions for properties transferred between spouses, to a trust for estate planning purposes, or in connection with a divorce settlement. Consult with your title company for specific eligibility.
How much does title insurance cost in Maryland?
Each underwriter files its own rates with the Maryland Insurance Administration, so premiums vary between companies. In Stewart Title's published Maryland schedule, a standard owner's policy on a $500,000 home is $2,507.50 before discounts, and the lender's policy issued with it is $350.
How do Maryland closing costs differ by county?
Combined state and county transfer tax is 1.9% in Prince George's County, 1.75% in Howard County, 1.5% in Montgomery County, 1.5% in Anne Arundel County (2.0% at $1 million or more), and 0.5% in Frederick County, which has no county transfer tax. These differences significantly impact total closing costs.
What is the first-time homebuyer benefit in Maryland?
First-time Maryland homebuyers buying a principal residence pay no state transfer tax: the rate drops from 0.5% to 0.25% and the seller pays all of it. By default the seller also pays the recordation and county transfer taxes, unless the contract expressly says otherwise. Separately, some counties exempt part of the price from recordation tax for any owner-occupant—Montgomery County exempts the first $100,000.
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