In this subsection the following words have the meanings indicated. “Acquired dwelling” means a dwelling: that was owned by a displaced homeowner; and that by negotiation or condemnation was acquired from the displaced homeowner for public use by the State or a political subdivision or instrumentality of the State, where the acquiring agency had the power to acquire the dwelling for public use by condemnation. “Acquisition year” means the taxable year in which an acquired dwelling was acquired for public use by the State or a political subdivision or instrumentality of the State. “Awarded compensation” means the amount awarded to the displaced homeowner from the acquiring agency when the State or a political subdivision or instrumentality of the State took possession of the acquired dwelling by negotiation or condemnation. “Displaced homeowner” means an individual whose legal interest in a dwelling was terminated through either negotiation or condemnation in exchange for awarded compensation. “Replacement dwelling” means a dwelling that is: purchased by a displaced homeowner within 2 taxable years immediately following the acquisition year; and is intended to be used as the principal residence of the displaced homeowner. The Mayor and City Council of Baltimore City or the governing body of a county may exempt, by law, from the recordation tax an instrument of writing that transfers title to improved residential real property to a displaced homeowner if the improved residential real property conveyed to the displaced homeowner qualifies as a replacement dwelling.