Montgomery County Tax Increases in Closing Costs

Montgomery County Council Passes Growth Policy - Recordation Tax Increase Goes Into Effect March 1, 2008

At its final voting session on the growth policy for 2007-2009, the County Council voted to increase impact taxes, impose new school and transportation adequacy tests, and increase the recordation tax. New revenue from the recordation tax increase will go towards rental assistance programs and County Government capital projects like roads, police, and fire stations. A motion was made to hold off on the recordation tax legislation until the Council begins budget deliberations in May, but ultimately failed. In the final version of the recordation tax increase that was approved:

• Sale price at $500,000 and below – NO increase on the recordation tax
• Sale Price above $500,000 – Rate increase of $3.10/$1,000 only on the additional consideration above $500,000; [i.e. a $600,000 sales price would be charged $6.90/$1000 on $550,000 (because of $50,000 exemption), then additional $3.10/$1000 on $100,000 which is the additional increment above $500,000, so essentially an additional $310 on a $600,000 home]
• Effective Date: March 1, 2008 and applies to any settlement that occurs on or after that date. Any settlement that occurs prior to March 1, 2008 will be subject to the old rates notwithstanding the date the deed is recorded. Contracts written prior to March 1, 2008 but go to settlement on or after March 1, 2008 are subject to the new rates.

If you have any questions about how this will affect your real estate purchase, please give me a call.  This tax is much better than it was originally written because we gave them a great deal of “input” about their original plans.

For more information about real estate sales in Bethesda, MD 20816 please email me at josette.skilling@longandfoster.com