Maryland 2025 Regular Session

Maryland House Bill HB342 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb0342
6	6
7	7	HOUSE BILL 342
8	8	Q6 5lr1403
9	9
10	10	By: Delegate Ruth
11	11	Introduced and read first time: January 13, 2025
12	12	Assigned to: Ways and Means
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	State Transfer Tax – Rates and Distribution of Revenue 2
19	19
20	20	FOR the purpose of altering the State transfer tax rate and the distribution of State 3
21	21	transfer tax revenue; and generally relating to the State transfer tax. 4
22	22
23	23	BY repealing and reenacting, with amendments, 5
24	24	Article – Tax – Property 6
25	25	Section 13–203 and 13–209(a) 7
26	26	Annotated Code of Maryland 8
27	27	(2019 Replacement Volume and 2024 Supplement) 9
28	28
29	29	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 10
30	30	That the Laws of Maryland read as follows: 11
31	31
32	32	Article – Tax – Property 12
33	33
34	34	13–203. 13
35	35
36	36	(a) (1) Except as provided in subsections (a–1) and (b) of this section, the rate 14
37	37	of the transfer tax: 15
38	38
39	39	(I) FOR RESIDENTIAL PROP ERTY is: 16
40	40
41	41	1. 0.25% OF THE CONSIDERATION PAYABLE FOR THE 17
42	42	INSTRUMENT OF WRITI NG IF THE CONSIDERAT ION IS LESS THAN $300,000; 18
43	43
44	44	2. 0.375% OF THE CONSIDERATION PAYABLE FOR THE 19
45	45	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $300,000 BUT LESS 20
46	46	THAN $400,000; 21
47	47	2 HOUSE BILL 342
48	48
49	49
50	50	3. 0.5% of the consideration payable for the instrument of 1
51	51	writing IF THE CONSIDERATION IS AT LEAST $400,000 BUT LESS THAN $500,000; 2
52	52
53	53	4. 0.75% OF THE CONSIDERATION PAYABLE FOR THE 3
54	54	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $500,000 BUT LESS 4
55	55	THAN $700,000; 5
56	56
57	57	5. 1% OF THE CONSIDERATION PAYABLE FOR THE 6
58	58	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $700,000 BUT LESS 7
59	59	THAN $1,000,000; 8
60	60
61	61	6. 1.25% OF THE CONSIDERATION PAYABLE FOR THE 9
62	62	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $1,000,000 BUT LESS 10
63	63	THAN $3,000,000; AND 11
64	64
65	65	7. 1.5% OF THE CONSIDERATION PAYABLE FOR THE 12
66	66	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $3,000,000; AND 13
67	67
68	68	(II) FOR NONRESIDENTIAL P ROPERTY IS: 14
69	69
70	70	1. 0.5% OF THE CONSIDERATION PAYABLE FOR THE 15
71	71	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS LESS THAN $5,000,000; 16
72	72
73	73	2. 0.75% OF THE CONSIDERATION PAYABLE FOR THE 17
74	74	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $5,000,000 BUT LESS 18
75	75	THAN $10,000,000; 19
76	76
77	77	3. 1% OF THE CONSIDERATION PAYABLE FOR THE 20
78	78	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $10,000,000 BUT 21
79	79	LESS THAN $20,000,000; 22
80	80
81	81	4. 1.25% OF THE CONSIDERATION PAYABLE FOR THE 23
82	82	INSTRUMENT OF WRITIN G IF THE CONSIDERATI ON IS AT LEAST $20,000,000 BUT 24
83	83	LESS THAN $40,000,000; AND 25
84	84
85	85	5. 1.5% OF THE CONSIDERATION PAYABLE FOR THE 26
86	86	INSTRUMENT OF WRITING IF T HE CONSIDERATION IS AT LEAST $40,000,000. 27
87	87
88	88	(2) The consideration: 28
89	89
90	90	(i) includes the amount of any mortgage or deed of trust assumed 29
91	91	by the grantee; and 30
92	92
93	93	(ii) subject to item (i) of this paragraph, includes only the amount 31 HOUSE BILL 342 3
94	94
95	95
96	96	paid or delivered in return for the sale of the property and does not include the amount of 1
97	97	any debt forgiven or no longer secured by a mortgage or deed of trust on the property. 2
98	98
99	99	(a–1) (1) Except as provided in subsection (b) of this section, the rate of the 3
100	100	transfer tax is [0.5%] THE APPLICABLE RATE UNDER SUBSECTION (A) OF THIS 4
101	101	SECTION of the consideration paid for the transfer of a controlling interest in a real 5
102	102	property entity as defined in § 13–103 of this title that has developed real property under 6
103	103	Section 42 of the Internal Revenue Code, the Low Income Housing Tax Credit Program. 7
104	104
105	105	(2) The consideration under this subsection shall be the actual payment 8
106	106	made by the purchaser to the seller for the purchase of the interest. 9
107	107
108	108	(b) (1) In this subsection, “first–time Maryland home buyer” means an 10
109	109	individual who has never owned in the State residential real property that has been the 11
110	110	individual’s principal residence. 12
111	111
112	112	(2) If there are two or more grantees, this subsection does not apply unless 13
113	113	each grantee is a first–time Maryland home buyer or a co–maker or guarantor of a purchase 14
114	114	money mortgage or purchase money deed of trust as defined in § 12–108(i) of this article 15
115	115	for the property and the co–maker or guarantor will not occupy the residence as the 16
116	116	co–maker’s or guarantor’s principal residence. 17
117	117
118	118	(3) Notwithstanding any other provision of law, for a sale of improved 18
119	119	residential real property to a first–time Maryland home buyer who will occupy the property 19
120	120	as a principal residence, the rate of the transfer tax is 0.25% of the consideration payable 20
121	121	for the instrument of writing and the transfer tax shall be paid entirely by the seller. 21
122	122
123	123	(4) To qualify for the exemption under paragraph (3) of this subsection, 22
124	124	each grantee or an agent of the grantee shall provide a statement that is signed under oath 23
125	125	by the grantee or agent of the grantee stating that: 24
126	126
127	127	(i) 1. the grantee is an individual who has never owned in the 25
128	128	State residential real property that has been the individual’s principal residence; and 26
129	129
130	130	2. the residence will be occupied by the grantee as the 27
131	131	grantee’s principal residence; or 28
132	132
133	133	(ii) 1. the grantee is a co–maker or guarantor of a purchase 29
134	134	money mortgage or purchase money deed of trust as defined in § 12–108(i) of this article 30
135	135	for the property; and 31
136	136
137	137	2. the grantee will not occupy the residence as the 32
138	138	co–maker’s or guarantor’s principal residence. 33
139	139
140	140	(5) A statement under paragraph (4) of this subsection by an agent of a 34
141	141	grantee shall state that the statement: 35
142	142	4 HOUSE BILL 342
143	143
144	144
145	145	(i) is based on a diligent inquiry made by the agent with respect to 1
146	146	the facts set forth in the statement; and 2
147	147
148	148	(ii) is true to the best of the knowledge, information, and belief of the 3
149	149	agent. 4
150	150
151	151	13–209. 5
152	152
153	153	(a) (1) Before any other distribution under this section, in any fiscal year that 6
154	154	bonds secured by a pledge of the State transfer tax are outstanding, the revenue from the 7
155	155	transfer tax shall be used to pay, as and when due, the principal of and interest on the 8
156	156	bonds. 9
157	157
158	158	(2) The Department shall deduct the cost of administering the transfer tax 10
159	159	from the taxes collected under this title and credit those revenues to the fund established 11
160	160	under § 1–203.3 of the Corporations and Associations Article. 12
161	161
162	162	(3) (I) Except as provided in paragraph (4) of this subsection AND 13
163	163	SUBJECT TO SUBPARAGR APHS (II), (III), AND (IV) OF THIS PARAGRAPH , after 14
164	164	deducting the revenues required under paragraphs (1) and (2) of this subsection, the 15
165	165	revenue from transfer tax is payable to the Comptroller for deposit in a special fund. 16
166	166
167	167	(II) BEFORE DEPOSITING THE REMAINING TRANSFER TAX 17
168	168	REVENUE IN A SPECIAL FUND UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE 18
169	169	COMPTROLLER SHALL CAL CULATE AN AMOUNT THAT IS EQ UAL TO 28% OF THE 19
170	170	REMAINING TRANSFER TAX REVENUE . 20
171	171
172	172	(III) 1. IF THE REMAINING TRAN SFER TAX REVENUE LES S 21
173	173	THE AMOUNT CALCULATE D UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH IS 22
174	174	LESS THAN THE AVERAG E AMOUNT DEPOSITED I N THE SPECIAL FUND F OR THE 5 23
175	175	IMMEDIATELY PRECEDIN G FISCAL YEARS, THE COMPTROLLER SHALL RED UCE THE 24
176	176	PERCENTAGE CALCULATE D UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH TO A 25
177	177	PERCENTAGE THAT , WHEN APPLIED TO THE REMAINING TRANSFER T AX REVENUE, 26
178	178	EQUALS THE AVERAGE A MOUNT DEPOSITED IN T HE SPECIAL FUND FOR THE 5 27
179	179	IMMEDIATELY PRECEDING FI SCAL YEARS AND DEPOS IT THAT AMOUNT IN TH E 28
180	180	SPECIAL FUND. 29
181	181
182	182	2. IF THE COMPTROLLER DOES NOT REDUCE OR 30
183	183	REDUCES THE PERCENTA GE CALCULATED UNDER SUBPARAGRAPH (II) OF THIS 31
184	184	PARAGRAPH TO A PERCENTAGE THAT IS GREATER THAN 0%, THE COMPTROLLER 32
185	185	SHALL DEPOSIT THAT PERCENTAGE OF THE RE MAINING TRANSFER TAX REVENUE 33
186	186	TO THE GENERAL FUND. 34
187	187
188	188	(IV) AFTER THE COMPTROLLER MAKES THE DEPOSITS 35
189	189	REQUIRED UNDER SUBPA RAGRAPHS (II) AND (III) OF THIS PARAGRAPH , THE 36 HOUSE BILL 342 5
190	190
191	191
192	192	COMPTROLLER SHALL DEP OSIT THE REMAINING TRANSFER TAX REVENUE IN THE 1
193	193	SPECIAL FUND. 2
194	194
195	195	(4) In any fiscal year in which transfer tax revenue is used to pay debt 3
196	196	service on outstanding bonds under paragraph (1) of this subsection, the distribution of 4
197	197	revenues in the special fund under this section and as specified in § 5–903(a)(2)(i)1A of the 5
198	198	Natural Resources Article, for State land acquisition, or to the Agricultural Land 6
199	199	Preservation Fund to the extent any debt service is attributable to that Fund, shall be 7
200	200	reduced by an amount equal to the debt service for the fiscal year. 8
201	201
202	202	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
203	203	1, 2025, and shall be applicable to instruments of writing recorded on or after July 1, 2025. 10
204	204