EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0342*
HOUSE BILL 342
Q6 5lr1403
By: Delegate Ruth
Introduced and read first time: January 13, 2025
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
State Transfer Tax – Rates and Distribution of Revenue 2
FOR the purpose of altering the State transfer tax rate and the distribution of State 3
transfer tax revenue; and generally relating to the State transfer tax. 4
BY repealing and reenacting, with amendments, 5
Article – Tax – Property 6
Section 13–203 and 13–209(a) 7
Annotated Code of Maryland 8
(2019 Replacement Volume and 2024 Supplement) 9
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 10
That the Laws of Maryland read as follows: 11
Article – Tax – Property 12
13–203. 13
(a) (1) Except as provided in subsections (a–1) and (b) of this section, the rate 14
of the transfer tax: 15
(I) FOR RESIDENTIAL PROP ERTY is: 16
1. 0.25% OF THE CONSIDERATION PAYABLE FOR THE 17
INSTRUMENT OF WRITI NG IF THE CONSIDERAT ION IS LESS THAN $300,000; 18
2. 0.375% OF THE CONSIDERATION PAYABLE FOR THE 19
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $300,000 BUT LESS 20
THAN $400,000; 21
2 HOUSE BILL 342
3. 0.5% of the consideration payable for the instrument of 1
writing IF THE CONSIDERATION IS AT LEAST $400,000 BUT LESS THAN $500,000; 2
4. 0.75% OF THE CONSIDERATION PAYABLE FOR THE 3
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $500,000 BUT LESS 4
THAN $700,000; 5
5. 1% OF THE CONSIDERATION PAYABLE FOR THE 6
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $700,000 BUT LESS 7
THAN $1,000,000; 8
6. 1.25% OF THE CONSIDERATION PAYABLE FOR THE 9
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $1,000,000 BUT LESS 10
THAN $3,000,000; AND 11
7. 1.5% OF THE CONSIDERATION PAYABLE FOR THE 12
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $3,000,000; AND 13
(II) FOR NONRESIDENTIAL P ROPERTY IS: 14
1. 0.5% OF THE CONSIDERATION PAYABLE FOR THE 15
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS LESS THAN $5,000,000; 16
2. 0.75% OF THE CONSIDERATION PAYABLE FOR THE 17
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $5,000,000 BUT LESS 18
THAN $10,000,000; 19
3. 1% OF THE CONSIDERATION PAYABLE FOR THE 20
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $10,000,000 BUT 21
LESS THAN $20,000,000; 22
4. 1.25% OF THE CONSIDERATION PAYABLE FOR THE 23
INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $20,000,000 BUT 24
LESS THAN $40,000,000; AND 25
5. 1.5% OF THE CONSIDERATION PAYABLE FOR THE 26
INSTRUMENT OF WRITING IF T HE CONSIDERATION IS AT LEAST $40,000,000. 27
(2) The consideration: 28
(i) includes the amount of any mortgage or deed of trust assumed 29
by the grantee; and 30
(ii) subject to item (i) of this paragraph, includes only the amount 31 HOUSE BILL 342 3
paid or delivered in return for the sale of the property and does not include the amount of 1
any debt forgiven or no longer secured by a mortgage or deed of trust on the property. 2
(a–1) (1) Except as provided in subsection (b) of this section, the rate of the 3
transfer tax is [0.5%] THE APPLICABLE RATE UNDER SUBSECTION (A) OF THIS 4
SECTION of the consideration paid for the transfer of a controlling interest in a real 5
property entity as defined in § 13–103 of this title that has developed real property under 6
Section 42 of the Internal Revenue Code, the Low Income Housing Tax Credit Program. 7
(2) The consideration under this subsection shall be the actual payment 8
made by the purchaser to the seller for the purchase of the interest. 9
(b) (1) In this subsection, “first–time Maryland home buyer” means an 10
individual who has never owned in the State residential real property that has been the 11
individual’s principal residence. 12
(2) If there are two or more grantees, this subsection does not apply unless 13
each grantee is a first–time Maryland home buyer or a co–maker or guarantor of a purchase 14
money mortgage or purchase money deed of trust as defined in § 12–108(i) of this article 15
for the property and the co–maker or guarantor will not occupy the residence as the 16
co–maker’s or guarantor’s principal residence. 17
(3) Notwithstanding any other provision of law, for a sale of improved 18
residential real property to a first–time Maryland home buyer who will occupy the property 19
as a principal residence, the rate of the transfer tax is 0.25% of the consideration payable 20
for the instrument of writing and the transfer tax shall be paid entirely by the seller. 21
(4) To qualify for the exemption under paragraph (3) of this subsection, 22
each grantee or an agent of the grantee shall provide a statement that is signed under oath 23
by the grantee or agent of the grantee stating that: 24
(i) 1. the grantee is an individual who has never owned in the 25
State residential real property that has been the individual’s principal residence; and 26
2. the residence will be occupied by the grantee as the 27
grantee’s principal residence; or 28
(ii) 1. the grantee is a co–maker or guarantor of a purchase 29
money mortgage or purchase money deed of trust as defined in § 12–108(i) of this article 30
for the property; and 31
2. the grantee will not occupy the residence as the 32
co–maker’s or guarantor’s principal residence. 33
(5) A statement under paragraph (4) of this subsection by an agent of a 34
grantee shall state that the statement: 35
4 HOUSE BILL 342
(i) is based on a diligent inquiry made by the agent with respect to 1
the facts set forth in the statement; and 2
(ii) is true to the best of the knowledge, information, and belief of the 3
agent. 4
13–209. 5
(a) (1) Before any other distribution under this section, in any fiscal year that 6
bonds secured by a pledge of the State transfer tax are outstanding, the revenue from the 7
transfer tax shall be used to pay, as and when due, the principal of and interest on the 8
bonds. 9
(2) The Department shall deduct the cost of administering the transfer tax 10
from the taxes collected under this title and credit those revenues to the fund established 11
under § 1–203.3 of the Corporations and Associations Article. 12
(3) (I) Except as provided in paragraph (4) of this subsection AND 13
SUBJECT TO SUBPARAGR APHS (II), (III), AND (IV) OF THIS PARAGRAPH , after 14
deducting the revenues required under paragraphs (1) and (2) of this subsection, the 15
revenue from transfer tax is payable to the Comptroller for deposit in a special fund. 16
(II) BEFORE DEPOSITING THE REMAINING TRANSFER TAX 17
REVENUE IN A SPECIAL FUND UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE 18
COMPTROLLER SHALL CAL CULATE AN AMOUNT THAT IS EQ UAL TO 28% OF THE 19
REMAINING TRANSFER TAX REVENUE . 20
(III) 1. IF THE REMAINING TRAN SFER TAX REVENUE LES S 21
THE AMOUNT CALCULATE D UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH IS 22
LESS THAN THE AVERAG E AMOUNT DEPOSITED I N THE SPECIAL FUND F OR THE 5 23
IMMEDIATELY PRECEDIN G FISCAL YEARS, THE COMPTROLLER SHALL RED UCE THE 24
PERCENTAGE CALCULATE D UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH TO A 25
PERCENTAGE THAT , WHEN APPLIED TO THE REMAINING TRANSFER T AX REVENUE, 26
EQUALS THE AVERAGE A MOUNT DEPOSITED IN T HE SPECIAL FUND FOR THE 5 27
IMMEDIATELY PRECEDING FI SCAL YEARS AND DEPOS IT THAT AMOUNT IN TH E 28
SPECIAL FUND. 29
2. IF THE COMPTROLLER DOES NOT REDUCE OR 30
REDUCES THE PERCENTA GE CALCULATED UNDER SUBPARAGRAPH (II) OF THIS 31
PARAGRAPH TO A PERCENTAGE THAT IS GREATER THAN 0%, THE COMPTROLLER 32
SHALL DEPOSIT THAT PERCENTAGE OF THE RE MAINING TRANSFER TAX REVENUE 33
TO THE GENERAL FUND. 34
(IV) AFTER THE COMPTROLLER MAKES THE DEPOSITS 35
REQUIRED UNDER SUBPA RAGRAPHS (II) AND (III) OF THIS PARAGRAPH , THE 36 HOUSE BILL 342 5
COMPTROLLER SHALL DEP OSIT THE REMAINING TRANSFER TAX REVENUE IN THE 1
SPECIAL FUND. 2
(4) In any fiscal year in which transfer tax revenue is used to pay debt 3
service on outstanding bonds under paragraph (1) of this subsection, the distribution of 4
revenues in the special fund under this section and as specified in § 5–903(a)(2)(i)1A of the 5
Natural Resources Article, for State land acquisition, or to the Agricultural Land 6
Preservation Fund to the extent any debt service is attributable to that Fund, shall be 7
reduced by an amount equal to the debt service for the fiscal year. 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
1, 2025, and shall be applicable to instruments of writing recorded on or after July 1, 2025. 10