Maryland closing costs surprise people who have bought in other states. The big reason is taxes. When a deed is recorded here, the state and the county each take a cut, and the buyer usually pays half. Add lender fees, title insurance and a few months of prepaid taxes and insurance, and a buyer with a loan should plan for a five-figure check at settlement on most homes in Central Maryland.
Here is each piece, roughly what it costs, and where first-time buyers get a break. Rates are as of October 2026 and they do change, so I’ve linked the sources.
The two Maryland taxes on every purchase
Every Maryland home sale is charged a transfer tax and a recordation tax. Both are collected by the title company at settlement and paid when the deed is recorded.
The state transfer tax is 0.5% of the price. Most counties add their own transfer tax on top, and every county charges recordation tax, which is set as a dollar amount per $500 of the price. Here are the rates for the areas we work in, from the October 13, 2026 rate summary published by the Maryland law firm Gordon Feinblatt:
| County or city | Recordation tax | County transfer tax |
|---|---|---|
| Anne Arundel | 0.7% ($3.50 per $500) | 1.0% (1.5% at $1 million and up) |
| Howard | 0.5% | 1.25% |
| Montgomery | Tiered, from 0.89% on the first $500,000 | Generally 1% |
| Prince George’s | 0.55% | 1.4% |
| Charles | 1.4% | 0.5% |
| Baltimore City | 1.0% (1.15% over $1 million) | 1.5% (2.1% over $1 million) |
| Baltimore County | 0.5% | 1.5% |
Montgomery County has extra tiers and some reductions for owner-occupied homes, so get the figure from your title company there. In every county, the title company’s estimate is the number to budget from.
Who pays: the 50/50 rule and the first-time buyer exception
Maryland law presumes the buyer and seller split the recordation and transfer taxes equally unless the contract says otherwise. In practice most contracts keep the even split, but it is negotiable like anything else in an offer.
First-time Maryland home buyers get two breaks under the same statute:
- The state transfer tax drops from 0.5% to 0.25%, and the seller pays all of it.
- The law puts the county transfer tax and recordation tax on the seller too, unless the contract says otherwise. The standard Maryland REALTORS contract does say otherwise: it keeps those two taxes split equally unless a First-time Maryland Homebuyer Transfer and Recordation Tax Addendum is attached. That addendum is something you can ask for in your offer.
“First-time” here means you have never owned a home in Maryland that was your principal residence. If two people are buying, both have to qualify (a co-signer who will not live there is fine). That is a different test from the one the state loan programs use, which we cover in our first-time buyer guide.
What that looks like on a $400,000 home
Take a $400,000 house in Anne Arundel County:
| Tax | Total | Buyer’s share, even split | Buyer’s share, first-time buyer |
|---|---|---|---|
| State transfer tax | $2,000 (0.5%) | $1,000 | $0 (0.25% rate, seller pays $1,000) |
| County transfer tax | $4,000 (1%) | $2,000 | $2,000 |
| Recordation tax | $2,800 (0.7%) | $1,400 | $1,400 |
| Buyer pays | $4,400 | $3,400 |
With the first-time buyer addendum signed by the seller, the buyer’s share of those taxes would be $0. Few sellers agree to that in a competitive market, but it does come up on a house that has been sitting.
Lender costs
If you are financing, your lender’s charges are the next biggest group. Federal rules require a Loan Estimate within three business days of your application, and it lists every one of these:
- Origination or underwriting fees, and any discount points you choose to pay for a lower rate.
- The appraisal. For a typical single-family home that commonly runs about $500 to $800.
- Credit report, flood certification and tax service fees, usually small.
- Mortgage insurance, if your loan needs it up front (FHA loans do).
Get Loan Estimates from two or three lenders in the same week and compare page 2, section A. That is the part the lender controls, and it is where the real price differences show up.
Title and settlement costs
In Maryland a title company or settlement attorney runs the closing. You will see:
- A settlement or closing fee for running the closing and handling the money.
- A title search and exam.
- Lender’s title insurance, which your lender requires.
- Owner’s title insurance, which is optional. It is a one-time premium, and it protects you, not the bank, if a problem with the title shows up later. I tell every buyer to get it.
- Recording fees. The circuit court clerks charge a $20 fee plus a $40 surcharge per document for a principal residence, so about $60 each for the deed and the deed of trust.
You are allowed to pick your own title company. Ask for a fee quote before you choose one.
Prepaids and escrow
These are not fees. They are your own costs paid in advance, and they still come out of your pocket at the table:
- The first year of homeowners insurance.
- An escrow deposit, usually a few months of property tax and insurance, so your lender can pay the next bills.
- Interest from the settlement date to the end of that month.
- A property tax adjustment. Maryland’s property tax year runs July 1 through June 30, and sellers usually have already paid for the year, so you reimburse them for the days after settlement.
If you are buying a condo or a home in an HOA, add the association’s fees for the resale package or transfer, and any upfront contribution the association charges new owners. Your contract and the resale documents spell these out.
Ways to bring the number down
Maryland Mortgage Program help
The state’s 1st Time Advantage loans come with down payment and closing cost help in the form of a 0% second loan: a flat $6,000, or 3%, 4% or 5% of the first mortgage depending on the option. The $6,000 version needs no payments for the life of the first mortgage and comes due when that loan ends (sale, refinance or payoff). If an employer or community group gives you help, the Partner Match program matches it up to $2,500 on the $6,000 products. You need an MMP-approved lender and a homebuyer education class, and income and price limits apply.
Seller credits
You can ask the seller to pay part of your closing costs. Your loan type caps how much, so check with your lender before writing the offer.
Inspection credits
If the inspection turns up real repairs, a credit toward closing costs is often easier for a seller than doing the work. I also own a licensed Maryland contractor, Monarch Bay Renovations, so we can tell you what a repair really costs before you decide what to ask for. Buyers tend to ask for too little on the big items and too much on the small ones.
Closing date
Settling late in the month means less prepaid interest. It does not lower the total cost of the loan, but it lowers the check you write at settlement.
The paperwork that shows your real number
Three documents, in order:
- The Loan Estimate, within three business days of applying.
- The Closing Disclosure, which your lender must send at least three business days before settlement.
- The settlement statement from the title company, which shows both sides of the deal.
Line them up and ask about anything that changed. And before you wire a dollar, call the title company at a number you already know is real and confirm the wiring instructions out loud. Wire fraud aimed at home buyers is common, and an email that looks like it came from your title company is not proof that it did.