Buy Your Next Maryland Home Before This One Sells
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
Most states let you reach your own equity for free. Maryland charges you for it, and it resets your property tax protection the moment you buy. Both belong in the plan before you choose a structure.
Maryland taxes the act of reaching your equity
This is the part that surprises people who have moved in other states. Maryland collects recordation tax when a lien is recorded, and the rule that matters for a move-up is in Md. Tax-Property 12-108(e): a supplemental instrument of writing is not subject to recordation tax except to the extent that actual consideration is payable on it, or the amount of unpaid outstanding principal debt is increased by it.
Read the second branch carefully. Increasing your principal is the taxable event. So a second mortgage or home equity line taken against the departing residence to fund a down payment is taxed on the new money.
The exemption people reach for does not cover it. Section 12-108(g) shelters a refinancing only up to the amount of unpaid outstanding principal of the original mortgage or deed of trust being refinanced, and only where the property is being refinanced by the original mortgagor. Refinancing your existing balance is sheltered. Adding to it is not. Detail on the recordation tax page.
Rates are set by each county and by Baltimore City, so the figure that applies to you is a local one. We do not publish a rate here; ask your county finance office or your title company for theirs.
And buying resets your property tax cap
Maryland's Homestead Tax Credit limits how fast the taxable assessment on an owner-occupied principal residence can rise. Under Md. Tax-Property 9-105 the credit is computed by multiplying the prior year's taxable assessment by the homestead credit percentage, subtracting that from the current year's assessment, and applying the tax rate to any positive difference.
The homestead credit percentage is 110% for the State property tax and for any bicounty commission tax. For county and municipal property tax it may not be less than 100% or exceed 110% in any taxable year, expressed in increments of 1 percentage point. A county at 100% is capping growth at zero.
Here is the part that decides a move-up. The credit is unavailable for a taxable year where, during the previous taxable year, the dwelling was transferred for consideration to new ownership. Buy a house and the accumulated protection is gone: you are assessed at current value and you start building the cap again from nothing. Full explanation on the homestead reset page.
How Marylanders buy first
| Structure | Works best when | The Maryland cost |
|---|---|---|
| Carry both, recast after | Income supports both payments | No new lien, so no recordation tax on new money |
| Borrow against current equity | Equity is strong, sale is near | Recordation tax on the increase in principal under 12-108(e) |
| Keep it and rent it | The departing home covers its own payment | No new lien, but the departing home can fail the 6-month occupancy test in 9-105 |
Maryland is the one state in this round where the financing choice carries a direct state tax consequence, which pushes the carry-and-recast route up the list more often than it would elsewhere. Compare them on the structures page.
The high-cost line follows Washington, not wealth
Maryland's 2026 one-unit conforming limit is $1,249,125 in Montgomery, Prince George's, Frederick and Charles counties, all in the Washington metropolitan area, and $1,209,750 in Calvert. The other 19 jurisdictions sit at $832,750.
That list includes Howard County, Anne Arundel County, Baltimore County and Baltimore City. Howard is one of the wealthiest counties in the country and it is at the baseline, $416,375 below Montgomery next door. The limit tracks the metropolitan area a county sits in, not what homes there cost. See the jumbo page.
Maryland's big markets are flat and its small ones are moving
As of August 2026, typical home values were $573,336 across the Washington metro, $490,791 in Easton, $435,183 in California, $424,977 in Salisbury, $400,263 in Baltimore, $323,970 in Hagerstown, $271,431 in Cambridge and $170,460 in Cumberland.
The direction is the interesting part. Washington rose 0.2%, Salisbury 0.1%, Baltimore 0.6%, and Easton fell 0.1%. Meanwhile Cumberland rose 3.1%, California 3.0% and Hagerstown 2.6%. The large markets are the flat ones. Since reserve tiers on bridge structures follow expected marketing time, that is the opposite of the usual assumption. See the move-up market page.
If you rent it out, the lease will not help you qualify
Fannie Mae Selling Guide B3-3.8-05, dated 09/02/2026 under Announcement SEL-2026-08, states that lease agreements are not permitted for any departing residence. Market rent comes from a full appraisal with market rents, a Form 1007 rent schedule, or market analysis tools with at least three comparable rentals.
The math is gross rent times 75%, less that property's PITIA. A positive result offsets the departing residence's payment and nothing more. Negative goes into your ratio. Under 12 months of property management experience, six months of reserves on the vacated home apply. Mechanics on the Form 1007 page.
Frequently asked questions
Can I buy a home in Maryland before my current one sells?
Yes. Three financing structures exist: carry both payments and recast the new loan after the sale, borrow against the equity in your current home, or keep the current home as a rental. Maryland is unusual in that the middle option carries a state recordation tax on the new money borrowed.
Does Maryland charge recordation tax on a second mortgage?
Yes, on the increase. Md. Tax-Property 12-108(e) subjects a supplemental instrument of writing to recordation tax to the extent that actual consideration is payable on it or the amount of unpaid outstanding principal debt is increased by it. Rates are set by each county and Baltimore City.
Is refinancing exempt from Maryland recordation tax?
Partly. Md. Tax-Property 12-108(g) exempts a refinancing up to the amount of unpaid outstanding principal of the original mortgage or deed of trust being refinanced, and only where the property is being refinanced by the original mortgagor, or that mortgagor and spouse, or the settlor of an inter vivos trust through its trustee. New money above the existing balance is not sheltered.
What is Maryland's state transfer tax rate?
0.5% of the consideration payable for the instrument of writing, under Md. Tax-Property 13-203(a)(1). Consideration includes the amount of any mortgage or deed of trust assumed by the grantee.
Does Maryland's first-time buyer relief apply to a move-up purchase?
No. Md. Tax-Property 13-203(b)(1) defines a first-time Maryland home buyer as an individual who has never owned residential real property in the State that has been that individual's principal residence. Where there are two or more grantees, the relief does not apply unless each qualifies.
Does the Maryland Homestead Tax Credit transfer to me when I buy?
No. Under Md. Tax-Property 9-105 the credit is unavailable for a taxable year where, during the previous taxable year, the dwelling was transferred for consideration to new ownership. A buyer is assessed at current value and begins accumulating cap protection from that point.
What is the Maryland homestead credit percentage?
110% for the State property tax and for any property tax imposed for a bicounty commission. For county and municipal property tax it may not be less than 100% or exceed 110% in any taxable year, and must be expressed in increments of 1 percentage point.
What are the 2026 conforming loan limits in Maryland?
$1,249,125 on one unit in Montgomery, Prince George's, Frederick and Charles counties, and $1,209,750 in Calvert County. The other 19 Maryland jurisdictions, including Howard, Anne Arundel, Baltimore County and Baltimore City, are at the $832,750 baseline.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Maryland recordation tax rates are set by each county and Baltimore City, and the Homestead Tax Credit is administered by the State Department of Assessments and Taxation; your county finance office, your CPA or a Maryland attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.