Maryland First Time Home Buyer Transfer Tax: What PG County Buyers Save at Closing (Part 3 of 30: The Prince George's County Answer Guide)

This is Part 3 of The Prince George's County Answer Guide from Donnell Williams Jr. and DMV Prime Properties, a 30-part series answering the questions buyers, sellers, and people relocating are actually searching about Prince George's County, Maryland. This post explains the Maryland first time home buyer transfer tax break and what it can mean at a Prince George's County closing.

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Under Maryland law, a first-time Maryland home buyer who will live in the home pays a reduced 0.25% state transfer tax, and the seller pays it. Maryland law also places the county transfer tax and recordation tax on the seller unless the contract expressly says otherwise. On a $450,000 Prince George's County home, that can shift more than $5,000 off the buyer.

Key Takeaways

• The standard Maryland state transfer tax is 0.5% of the price, according to Md. Code, Tax-Property § 13-203.
• For a first-time Maryland home buyer who will occupy the home, the state rate drops to 0.25% and is paid entirely by the seller.
• Md. Code, Real Property § 14-104 says the seller pays the full recordation tax and local transfer tax in these sales, unless the parties expressly agree otherwise.
• Prince George's County charges a 1.4% county transfer tax and recordation tax of $5.50 per $1,000, according to the county Office of Finance.
• Maryland's definition of a first-time buyer is stricter than the county's Pathway to Purchase definition.
• HB 790 (2026) proposed a full state transfer tax exemption for first-time buyers, but the legislature's record shows no action after its February hearing.

What is the Maryland first time home buyer transfer tax break?

Maryland charges taxes when a deed is recorded. In Prince George's County, three of them show up on most purchases:

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• State transfer tax: a Maryland tax on the transfer of real property.
• County transfer tax: a Prince George's County tax on the same transfer.
• Recordation tax: a tax charged when the deed is recorded in the county land records.

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The Maryland first time home buyer transfer tax break changes both the rate and who pays. According to Md. Code, Tax-Property § 13-203, the general state transfer tax rate is 0.5% of the price. When improved residential property is sold to a first-time Maryland home buyer who will occupy it as a principal residence, the rate is 0.25%, and the law says it "shall be paid entirely by the seller."

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A separate statute, Md. Code, Real Property § 14-104, deals with the county taxes. In a sale to a qualifying first-time buyer, it says the entire recordation tax and local transfer tax are paid by the seller, unless there is an express agreement between the parties. For other sales, the same section presumes these taxes are shared equally between buyer and seller, unless the contract says otherwise.

Who counts as a first-time Maryland home buyer?

Maryland defines a first-time Maryland home buyer as an individual who has never owned residential real property in Maryland that was the individual's principal residence. That is the language in both § 13-203 and § 14-104.

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This is not the same as the definition used by Pathway to Purchase, which only looks back three years (see Part 1 of this series on the Prince George's County first time home buyer program). A buyer who owned and lived in a Bowie townhouse in 2015 could qualify for Pathway to Purchase in 2026 but would not qualify for the state transfer tax break.

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What if two people are buying together?

Under § 14-104, when there are two or more buyers, the seller-pays rule applies only if each buyer is a first-time Maryland home buyer, or is a co-signer or guarantor on the purchase loan who will not live in the home. One buyer who previously owned a Maryland principal residence can disqualify the purchase.

How do you prove it?

Each buyer, or the buyer's agent, signs a statement under oath at settlement confirming first-time status and principal residence use. Your settlement company prepares it, so answer accurately.

How much does a first-time buyer save on a $450,000 home in Prince George's County?

According to the Prince George's County Association of REALTORS April 2026 Market Watch, the county's median sold price was $450,000. The table below uses that price and these published rates:

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• State transfer tax: 0.5% standard, 0.25% for a qualifying first-time buyer (Md. Code, Tax-Property § 13-203).
• County transfer tax: 1.4% (Prince George's County Office of Finance, Treasury Division).
• Recordation tax: $5.50 per $1,000 of price (Prince George's County Office of Finance).

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The "default" columns follow the statutory presumptions in § 14-104 and § 13-203. Your contract can change who pays.

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Under these default rules, a qualifying first-time buyer could save about $5,512.50 in transfer and recordation taxes compared with a repeat buyer on the same home. The seller's side also changes: the seller would pay about $9,900 instead of about $5,512.50.

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These are illustrations, not a settlement statement. Your settlement company calculates the final figures. For the full list of closing costs, see Part 7 of this series on Prince George's County transfer and recordation tax.

Can the seller make the buyer pay these taxes anyway?

The state transfer tax rule in § 13-203 says the reduced tax is paid entirely by the seller. The county transfer and recordation tax rule in § 14-104 allows the parties to agree otherwise in writing. In practice, the purchase contract and its addenda decide how these county taxes are allocated.

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This is a negotiation point, especially in a market with more listings. The PGCAR April 2026 Market Watch counted 1,872 active listings, up 29.6% year over year, and a median of 21 days on market. More choice for buyers can mean more room to hold the statutory default instead of agreeing to shift taxes back. Sellers are already contributing: according to Bright MLS data for Prince George's County for September 2026, 396 of the 580 September sales (68%) included seller concessions, with a median concession of $12,511 when one was paid.

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Donnell Williams Jr. has worked Prince George's County deals since starting at Asset Realty in 2000, and sellers sometimes learn about this rule only when the settlement statement arrives. A clear offer that states the buyer's first-time status early avoids a dispute late in the deal (see Part 13 of this series on who pays transfer tax in Prince George's County).

What happened with HB 790 in 2026?

House Bill 790, titled "State Transfer Tax - Exemption for First-Time Home Buyers - Alterations," was introduced in the 2026 Maryland General Assembly session. According to the Department of Legislative Services fiscal note, it would have replaced the reduced 0.25% rate with a full exemption from the state transfer tax for qualifying first-time buyers. The fiscal note estimated state transfer tax revenue would fall by about $20 million per year beginning in fiscal year 2027.

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The Maryland General Assembly's bill page shows a first reading on February 4, 2026, referral to the House Ways and Means Committee, and a hearing on February 17, 2026. It lists no committee vote or floor action after that hearing. Unless a later record shows otherwise, buyers should plan on the current law: a 0.25% state rate paid by the seller.

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Even if a full exemption passes in a future session, it would affect only the state transfer tax. The Prince George's County transfer tax and recordation tax are separate, and the rules in § 14-104 would still govern who pays them.

Does the first-time buyer break work with assistance programs?

Yes, they are separate. The transfer tax rules come from state law and apply at settlement. Down payment assistance, such as Pathway to Purchase or the Maryland Mortgage Program, comes through your lender. A buyer can qualify for both, one, or neither, depending on each set of rules (see Part 4 of this series on Maryland first time home buyer down payment assistance).

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When a seller pays more in taxes, buyers may have less room to request other seller credits, so look at total closing costs before writing your offer.

Frequently Asked Questions

Do first-time buyers pay transfer tax in Maryland?

Under Md. Code, Tax-Property § 13-203, a qualifying first-time Maryland home buyer who will occupy the home faces a reduced 0.25% state transfer tax, and the seller pays it. Under § 14-104, the seller also pays the county transfer and recordation taxes unless the contract expressly says otherwise.

What is the Prince George's County transfer tax rate?

According to the Prince George's County Office of Finance, the county transfer tax is 1.4%. Recordation tax is $5.50 per $1,000 of the price.

I owned a home in Virginia. Am I a first-time Maryland home buyer?

Maryland's definition looks at whether you have ever owned residential property in Maryland that was your principal residence. A prior Virginia home is not mentioned in that definition. Confirm your situation with your settlement company or a Maryland real estate attorney before signing the sworn statement.

Did Maryland eliminate transfer tax for first-time buyers in 2026?

HB 790 proposed a full exemption from the state transfer tax, but the legislature's record shows no action after its February 17, 2026 hearing. Current law still applies a reduced 0.25% rate, paid by the seller.

Does the first-time buyer rule apply to new construction?

The statutes refer to improved residential property sold to a first-time buyer who will occupy it as a principal residence. Builder contracts often have their own closing cost terms, so read the tax allocation clause carefully (see Part 9 of this series on new construction townhomes in Prince George's County).

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This article is general information, not legal, tax, or lending advice. Confirm your figures with your settlement company and a Maryland real estate attorney.

Next Steps

The Maryland first time home buyer transfer tax break only helps if your offer is written to protect it. Donnell Williams Jr., Broker-Owner of DMV Prime Properties, licensed in Maryland, DC, and Virginia, and author of The Complete Guide to Buying a Home, offers a buyer consult that reviews your first-time status, estimates your closing costs, and shows how the tax rules affect your offer strategy. Call 301.265.3446, email donnell@dmvprimerealty.com, or visit OWNDMV.COM. DMV Prime Properties is at 12815 Old Fort Road, Suite 105, Fort Washington, MD 20744.

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