Understanding Prince George’s County Transfer Tax: A Quick Guide
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Selling a home in Prince George’s County involves various costs; one of the most significant real estate transfer taxes.
These taxes are a one-time fee paid during the property sale process and are calculated based on the home’s sale price. Understanding how these taxes work is important for Prince George’s County sellers to avoid surprises at the closing table.
In this guide, we’ll break down everything you need to know about transfer taxes in Prince George’s County, including who pays for them, the different types of transfer taxes, and whether exemptions or deductions are available.
We’ll also provide tips on estimating what you might owe so you can plan accordingly. Whether you’re selling your first home or have been through the process, this guide will help you confidently handle transfer taxes.
Connect with a Top Agent to Help Maximize Value
Even rockstar agents can’t make your tax liability disappear, but HomeLight data shows that the top 5% of agents across the U.S. help clients sell their home for as much as 10% more than the average real estate agent, helping offset the tax bill.
What are transfer taxes?
Real estate transfer taxes are charges imposed by state or local governments when the title of a property is transferred from one owner to another. According to the Federal Trade Commission, these taxes are typically required during the sale of a home as part of the legal process of transferring ownership.
The amount owed in transfer taxes depends on where the property is located, as state, county, and city guidelines vary. These taxes, like other types of government fees, are primarily designed to generate revenue to support public services and infrastructure. Understanding the rules for transfer taxes in Prince George’s County is an important step to take when planning your home sale.
Who pays for transfer taxes?
In Maryland, including Prince George’s County, the responsibility for paying transfer taxes falls to both the buyer and the seller of a property. Typically, these taxes are part of the closing costs and can be negotiated during the sale process.
It’s common for buyers and sellers to share the burden of these taxes, but the specifics can be worked among each party before the sale is finalized.
What are the types of transfer taxes?
Transfer taxes will typically vary based on local guidelines but can generally be broken down into three categories — state, city, and county, depending on the state. Here’s a quick look at how it works in Prince George’s County.
State transfer taxes
At the state level, Maryland’s transfer tax is .5% of the property’s purchase price (or actual consideration). However, first-time home buyers in the state who are purchasing a primary residence are eligible to be taxed at a rate of .25%.
First-time home buyers are required to submit an exemption form to determine eligibility.
Here’s a quick look at the transfer taxes you might be responsible for on a Maryland home that sold for $450,000:
- $450,000 taxed at a rate of .5% = $2,250 transfer tax
- $450,000 taxed at a rate of .25% (first-time home buyer exemption) = $1,125
County transfer taxes
There are several counties in Maryland that impose additional county transfer taxes.
The current Prince George’s County transfer tax rate is 1.4%. This is in addition to any state transfer tax on the property.
Other transfer fees
In addition to transfer taxes, there are possible fees to consider, such as from a homeowner’s association or another local neighborhood organization. Again, as these can vary heavily based on location, it’s important to consult a professional.
If you’re selling your home for sale by owner, consulting a professional might help with some of the finer points of the process and give you a better idea of what you can expect.
Transfer tax exemptions
There are several possible transfer tax exemptions in Prince George’s County. This can include when a property is being financed or is a non-principal residence. For a complete list, refer to the Prince George’s County Finance Affidavit.
Estimating transfer taxes for your home sale
To get a quick idea of how much you might make from selling your Prince George’s County home, try HomeLight’s Net Proceeds Calculator. This tool factors in key expenses, such as transfer taxes, agent commissions, and any closing costs, to give you a clear estimate of your potential profit.
For a more detailed and personalized assessment of transfer taxes and other costs associated with selling your home, consult a top real estate agent. Experienced agents understand the local market and can help you manage the negotiation of transfer taxes, which may vary based on your specific circumstances.
Editor’s note: This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of Prince George’s County area tax services or attorneys should not be considered endorsements.
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