New Montgomery County Recordation Tax Law

Effective September 1, 2016, the Montgomery County Recordation Tax is being increased from $6.90 per $1000 of consideration paid to $8.90 per $1000 of consideration paid. This applies to the first $500,000 of consideration paid. For amounts in excess of $500,000, the Recordation Tax increases from $10.00 per $1000 of consideration paid to $13.50 per $1000 of consideration paid. In addition, the current law exempts the first $50,000 of consideration paid from taxation if the buyer will occupy the property as its principal residence at least 7 months of the 12 month period immediately after the property has been conveyed. This portion of the law has been changed to exempt the first $100,000 of consideration from taxation if the buyer is an individual who will occupy the property as its principal residence at least 7 months of the 12 month period immediately after the property has been conveyed. The new rates apply to any transaction which occurs on or after September 1, 2016. Undoubtedly, more details about the application of the new rates will be announced as we get closer to the September 1, 2016 effective date.

Update:

Montgomery County just issued a clarification of the new law. The new recordation tax rates and exemption apply to any transaction that occurs on or after September 1, 2016. THE COUNTY WILL RELY ON THE LATER OF THE DATE OF THE DOCUMENT OR THE LAST ACKNOWLEDGMENT (NOTARY) TO DETERMINE WHEN A TRANSACTION OCCURS. If the date of the document or the last acknowledgment is on September 1, 2016 or after, the documents will be subject to the new rates.

View the law as PDF.

FB
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