The non-resident seller withholding transfer tax, which is charged to sellers who are out of state without certain requirements, will be raised to 8% as of January 1, 2020.
**PLEASE NOTE — THIS IS FROM 2019/2020. THE LAW AND % CHARGE, AS WELL AS ADDENDA MAY CHANGE AT ANY TIME.** MAKE SURE TO CHECK WITH THE MARYLAND STATE GOVERNMENT OR A LAWYER FOR UPDATED INFORMATION AND FORMS.**
This withholding tax has been charged to sellers who moved, and other out of state sellers of homes in the State of Maryland.
This will affect sellers who have to move out of town prior to selling their Maryland homes.
The rate had dropped in 2011, risen to 7% in 2013, and rose again to 7.5% in 2016.
Here is the link to information on the withholding tax directly from the Comptroller of Maryland’s website.
Thank you to Sage Title Group for the notification of this change. (See notification sent below.)
According to the old form, as put out by the Maryland Association of REALTORS(R),
“As defined under Maryland law and as used in a) and b) above, the term “total payment” means the net proceeds paid to the Seller for the Property and associated tangible personal property, less: 1) debts owed by the Seller and secured by a mortgage or other lien against the Property being paid upon the sale or exchange of the Property and 2) other expenses of the Seller arising out of the sale or exchange of the Property and disclosed on a settlement statement prepared in connection with the sale or exchange of the Property. “Total payment” includes the fair market value of any property transferred to the Seller.”
As always, you will want to contact an attorney for legal advice and a tax accountant for tax advice if you are a Maryland out-of-state seller. I am not a lawyer and cannot give legal advice, nor am I a tax accountant, so I cannot give tax advice.
Please note that all Maryland Association of REALTORS(R) forms are copy-written, and are for the use only of Maryland REALTORS(R) and their clients in a transaction, and may not be changed in any way without written permission from the Maryland Association of REALTORS(R).