In this subtitle, “transfer tax” means the tax imposed under this subtitle.

Except as otherwise provided in this subtitle, a transfer tax is imposed on an instrument of writing: recorded with the clerk of the circuit court for a county; or filed with the Department and described in § 12-103(d) of this article.

Except as provided in subsections (a–1) and (b) of this section, the rate of the transfer tax is 0.5% of the consideration payable for the instrument of writing. The consideration: includes the amount of any mortgage or deed of trust assumed by the grantee; and subject to item (i) of this paragraph, includes only the amount paid or delivered in return for the sale of the property and does not include the amount of any debt forgiven or no longer secured by a mortgage or deed of trust on the property. Except as provided in subsection (b) of this section, the rate of the transfer tax is 0.5% of the consideration paid for the transfer of a controlling interest in a real property entity as defined in § 13–103 of this title that has developed real property under Section 42 of the Internal Revenue Code, the Low Income Housing Tax Credit Program. The consideration under this subsection shall be the actual payment made by the purchaser to the seller for the purchase of the interest. In this subsection, “first–time Maryland home buyer” means an individual who has never owned in the State residential real property that has been the individual’s principal residence. If there are two or more grantees, this subsection does not apply unless each grantee is a first–time Maryland home buyer or a co–maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in § 12–108(i) of this article for the property and the co–maker or guarantor will not occupy the residence as the co–maker’s or guarantor’s principal residence. Notwithstanding any other provision of law, for a sale of improved residential real property to a first–time Maryland home buyer who will occupy the property as a principal residence, the rate of the transfer tax is 0.25% of the consideration payable for the instrument of writing and the transfer tax shall be paid entirely by the seller. To qualify for the exemption under paragraph (3) of this subsection, each grantee or an agent of the grantee shall provide a statement that is signed under oath by the grantee or agent of the grantee stating that: the grantee is an individual who has never owned in the State residential real property that has been the individual’s principal residence; and the residence will be occupied by the grantee as the grantee’s principal residence; or the grantee is a co–maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in § 12–108(i) of this article for the property; and the grantee will not occupy the residence as the co–maker’s or guarantor’s principal residence. A statement under paragraph (4) of this subsection by an agent of a grantee shall state that the statement: is based on a diligent inquiry made by the agent with respect to the facts set forth in the statement; and is true to the best of the knowledge, information, and belief of the agent.

The consideration payable shall be described in: the recitals or the acknowledgment of the instrument of writing; or a statement under oath that accompanies the instrument of writing and that is signed by a party to the instrument or by an agent of a party.

If a lease of real property creating a perpetually renewable ground rent is recorded without a transfer of the reversionary estate for full consideration other than the ground rent being recorded at the same time, the transfer tax applies to the redemption sum as determined under § 8–804 of the Real Property Article plus any additional consideration payable. If the lease is recorded at the same time with the transfer of the reversionary estate created for full consideration, the lease is not subject to transfer tax. Except as provided in § 13–207(a)(14) of this subtitle, for a lease of real property for a term of years not perpetually renewable, the transfer tax applies to: the average annual rent over the term of the lease, including renewals, capitalized at 10% plus any additional consideration payable, other than rent; or if the average annual rent cannot be determined, the greater of: 105% of the minimum average annual rent, as determined by the lease, capitalized at 10%, plus any additional consideration payable, other than rent; or 60% of the assessment of the real property subject to lease. In this subsection, “document”: means any document that publicizes or gives constructive notice of an unrecorded lease; and includes: an attornment agreement; a memorandum of a lease; and an assignment of a lease. A document may be recorded only if the original lease is submitted and transfer tax on the document and the original lease is paid. Subject to § 13–102 of this title, the lessee is chargeable with transfer tax on the original lease. If a lessee fails or refuses to pay transfer tax after a demand is made, the party offering the original lease for recordation may: pay the recordation tax; and sue the lessee to recover the amount of transfer tax paid, with interest from the date of payment of transfer tax. Transfer tax shall be paid on the original lease only if the original lease was required to be recorded under § 3–101 of the Real Property Article. For a transfer under § 13–206 of this subtitle, the transfer tax applies to the value of the real property determined by the Department at the date of finality immediately before the date of transfer. For a transfer by articles of merger, articles of consolidation, or other documents which evidence a merger or consolidation of foreign corporations, foreign partnerships, foreign limited liability companies, or foreign limited partnerships, the transfer tax applies to the value of the real property determined by the Department at the date of finality immediately before the date of the merger or consolidation.

Except as provided in § 13-207(a)(9), (10), (15), and (16) of this subtitle, the transfer tax applies to conveyances that transfer the real property of a corporation to its stockholders, the real property of a limited liability company to its members, or the real property of a partnership to its partners.

An instrument of writing is not subject to transfer tax to the same extent that it is not subject to recordation tax under: § 12–108(a) of this article (Transfer to government or public agency); § 12–108(c) of this article (Transfer between relatives and domestic partners); § 12–108(d) of this article (Transfer between spouses and domestic partners); § 12–108(e) of this article (Supplemental instrument); § 12–108(f) of this article (Previously recorded instrument); § 12–108(l) of this article (Judgments); § 12–108(n) of this article (Order of satisfaction); § 12–108(o) of this article (Participation agreement); § 12–108(p) of this article (Transfer of property between related business entities); § 12–108(q) of this article (Corporate or partnership conveyance); § 12–108(r) of this article (Land installment contracts); § 12–108(s) of this article (Options to purchase real property); § 12–108(t) of this article (Deed for prior contract of sale); § 12–108(u) of this article (Leases of 7 years or less); § 12–108(v) of this article (Mergers); § 12–108(w) of this article (Consolidations); § 12–108(x) of this article (Cooperative housing corporations); § 12–108(y) or (bb) of this article (Transfer from predecessor entity or real estate enterprise to limited liability company); § 12–108(z) of this article (Transfer from a Class I Railroad Carrier to its wholly owned limited liability company); § 12–108(aa) of this article (Transfers involving certain Maryland Stadium Authority affiliates); § 12–108(cc) of this article (Certain transfers to land trusts); § 12–108(dd) of this article (Transfer from an estate); § 12–108(ee) of this article (Transfer to a trust and transfer from a trust under specified circumstances); § 12–108(ff) of this article (Transfer from a certified community development financial institution); § 12–108(gg) of this article (Transfer of principal residence surrendered in bankruptcy); § 12–108(hh) of this article (Transfer of real property within the Pimlico racing facility site, Pimlico site, Bowie Race Course Training Center property, or training facility site); or § 12–108(ii) of this article (Real property transfer–on–death deed). An instrument of writing that transfers agricultural land that the transferee is acquiring for the purpose of maintaining the character of the land as agricultural land is not subject to the transfer tax, if the transferee: is exempt from federal income tax under § 501(c)(3) of the Internal Revenue Code; is incorporated, qualified, or registered to do business in the State; has as its principal purpose the preservation of agricultural land, including the temporary ownership of an interest in land for the purpose of preserving the character of the land as agricultural land; and has been certified by the Department as meeting the requirements of this paragraph. If a transferee notifies the Department at least 7 days before the date of transfer of property to the transferee, the Department shall notify, in writing, the clerk of the circuit court for the county in which the property being transferred is located of the name and address of each transferee that has been certified under paragraph (1) of this subsection. An instrument of writing is not subject to the transfer tax, if the instrument of writing transfers property from: the United States; the State; an agency of the State; or a political subdivision in the State.

Transfer tax on an instrument of writing that is taxable under this subtitle shall be paid to the clerk of the circuit court where the instrument of writing is recorded or to the Department. An instrument of writing taxable under this subtitle may not be recorded in any county unless a statement is attached to or stamped on the instrument of writing that indicates: that transfer tax has been paid; and the amount of transfer tax paid. The presence of the statement required by subsection (b) of this section on an instrument of writing is prima facie evidence of payment of transfer tax.

Before any other distribution under this section, in any fiscal year that bonds secured by a pledge of the State transfer tax are outstanding, the revenue from the transfer tax shall be used to pay, as and when due, the principal of and interest on the bonds. The Department shall deduct the cost of administering the transfer tax from the taxes collected under this title and credit those revenues to the fund established under § 1–203.3 of the Corporations and Associations Article. Except as provided in paragraph (4) of this subsection, after deducting the revenues required under paragraphs (1) and (2) of this subsection, the revenue from transfer tax is payable to the Comptroller for deposit in a special fund. In any fiscal year in which transfer tax revenue is used to pay debt service on outstanding bonds under paragraph (1) of this subsection, the distribution of revenues in the special fund under this section and as specified in § 5–903(a)(2)(i)1A of the Natural Resources Article, for State land acquisition, or to the Agricultural Land Preservation Fund to the extent any debt service is attributable to that Fund, shall be reduced by an amount equal to the debt service for the fiscal year. For the fiscal year beginning July 1, 2002, and for subsequent fiscal years, up to 3% of the revenues in the special fund may be appropriated in the State budget for salaries and related expenses in the Departments of General Services and Natural Resources and in the Department of Planning necessary to administer Title 5, Subtitle 9 of the Natural Resources Article (Program Open Space). Subject to subsection (e) of this section, of the balance of the revenue in the special fund, not required under subsection (b) of this section: for the fiscal year beginning July 1, 2002, $47,268,585 shall be allocated to the General Fund of the State and the remainder shall be allocated as provided in subsection (d) of this section; for the fiscal year beginning July 1, 2003, $102,833,869 shall be allocated to the General Fund of the State and the remainder shall be allocated as provided in the State budget; for the fiscal year beginning July 1, 2004, $147,374,444 shall be allocated to the General Fund of the State, and the remainder shall be allocated as provided in the State budget; and for the fiscal year beginning July 1, 2005, $68,223,132 shall be allocated to the General Fund of the State and the remainder shall be allocated as provided in subsection (d) of this section. Subject to subsection (e) of this section, for the fiscal years beginning July 1, 2006, and each subsequent fiscal year, the balance of the revenue in the special fund, not required under subsection (b) of this section shall be allocated as provided in subsection (d) of this section. Subject to subsection (e) of this section, for fiscal years 2026 through 2029, of the balance of the revenue in the special fund not required under subsection (b) of this section, $25,000,000 shall be allocated to the General Fund of the State and the remainder shall be allocated as provided in subsection (d) of this section. For each of fiscal years 2026 through 2029, the allocation required under subparagraph (i) of this paragraph shall reduce the amount allocated for Program Open Space land acquisition purposes identified in subsection (d)(1)(ii) of this section and § 5–903(a)(2)(i)1A of the Natural Resources Article, the Agricultural Land Preservation Fund identified in subsection (d)(2) of this section, and the Rural Legacy Program identified in subsection (d)(3) of this section and § 5–903(a)(2)(iii) of the Natural Resources Article by an amount that is proportional to the amount of revenue each program is estimated to receive for the fiscal year. Subject to subsections (d–1) and (e) of this section, for the fiscal year beginning July 1, 2002, and for each subsequent fiscal year, the balance of the revenue in the special fund, not required under subsection (b) of this section and not allocated to the General Fund under subsection (c)(1) and (3) of this section shall be allocated in the State budget as follows: 15% for the purposes specified in Title 5, Subtitle 9 of the Natural Resources Article (Program Open Space); and an additional 1% for Program Open Space, for land acquisition purposes as specified in § 5–903(a)(2) of the Natural Resources Article; 05% for the Agricultural Land Preservation Fund established under § 2–505 of the Agriculture Article; 5% for the Rural Legacy Program established under § 5–9A–01 of the Natural Resources Article; and 8% for the Heritage Conservation Fund established under § 5–1501 of the Natural Resources Article. In this subsection, “eligible purpose” means a purpose, program, or fund to which revenue in the special fund is required to be allocated under subsection (d) of this section. For any fiscal year beginning on or after July 1, 2010, but before July 1, 2013, for which funding is provided for an eligible purpose through the State Consolidated Capital Bond Funding Program or other bond enabling act: from the balance of the special fund, before the allocations under subsection (d) of this section are made, an amount shall be allocated to the General Fund of the State equal to the total amount of funding provided for eligible purposes through the bond enabling act; and except as otherwise expressly provided under the bond enabling act through which the funding is provided, the allocations provided under subsection (d) of this section shall be adjusted to reduce the amount that would otherwise be allocated for each eligible purpose by the amount of funding provided for that purpose under the bond enabling act. Notwithstanding any other provision of law, a transfer under this subsection may not be taken into account for purposes of determining any allocation or appropriation required under subsection (f) or (g) of this section. The sums allocated in subsection (d) of this section may not revert to the General Fund of the State. Except as provided in subparagraphs (ii) and (iii) of this paragraph, for any fiscal year in which the actual transfer tax revenue collections are greater than the revenue estimates used as the basis for the appropriations required under this section for the fiscal year, the amount of the excess shall be allocated to the special fund under subsection (a) of this section as provided under subsections (c) and (d) of this section for the second fiscal year following the fiscal year in which there is an excess. Notwithstanding subparagraph (i) of this paragraph or any other provision of law, $21,776,868 of the transfer tax collected but not appropriated or transferred in fiscal 2004 shall be transferred to the General Fund of the State. Notwithstanding subparagraph (i) of this paragraph or any other provision of law, in any fiscal year in which an appropriation or transfer is made from the special fund to the General Fund, if the actual transfer tax revenue collections for the prior fiscal year exceed the budget estimate for the prior fiscal year, the excess shall be allocated in the current fiscal year for Program Open Space, the Agricultural Land Preservation Fund, the Rural Legacy Program, and the Heritage Conservation Fund. Funds made available under this subparagraph shall be allocated as provided under subsection (d) of this section. For any fiscal year in which the actual transfer tax revenue collections are less than the revenue estimates used as the basis for the appropriations required under this section, the amount of the deficiency shall be reconciled as follows: for the first $3,000,000 of any deficiency, the allocation to the special fund under subsection (a) of this section as provided under subsections (c) and (d) of this section for the second fiscal year following the deficiency shall be reduced by either the amount of the deficiency or $3,000,000, whichever is less; for any deficiency in excess of $3,000,000, the amount in excess of $3,000,000 shall be reconciled either by the reduction of the allocation to the special fund under subsection (a) of this section as provided under subsections (c) and (d) of this section for the second fiscal year following the deficiency or by the deauthorization of projects authorized in prior fiscal years; for the allocation of the special fund under subsection (a) of this section, in the fiscal year beginning July 1, 2016, transfer tax revenue under–attainment from the fiscal year beginning July 1, 2014, will not be applied; and transfer tax revenue in fiscal year 2015, that is in excess of $161,016,000 may be transferred by budget amendment in fiscal year 2016 for: administrative expenses related to land acquisition for Program Open Space; critical maintenance projects in the Department of Natural Resources; Natural Resources Development Fund projects in the Department of Natural Resources; and replacement of General Fund appropriations in the Maryland Park Service. Any amounts to be deauthorized from prior fiscal years under paragraph (2)(ii) of this subsection shall be proposed by the Governor in the budget of the second fiscal year following the fiscal year in which there is a deficiency. An amount may be deauthorized under this paragraph only as provided in the State budget bill, as enacted. The Governor shall include in the annual budget bill for fiscal year 2023 a General Fund appropriation to the special fund in the amount of $12,500,000. The appropriation required under subparagraph (i) of this paragraph: is not subject to the provisions of subsections (a), (b), (c), and (f) of this section; shall be allocated as provided in subsection (d) of this section and § 5–903 of the Natural Resources Article; and shall be reduced by the amount of any appropriation from the General Fund to the special fund that: exceeds the required appropriation under this paragraph; and is identified as an appropriation for reimbursement under this paragraph. The Governor shall include in the annual budget bill for fiscal year 2023 a General Fund appropriation to the special fund in the amount of $6,000,000 for park development and the critical maintenance of State projects located on lands managed by the Department of Natural Resources for public purposes. The appropriation required under subparagraph (i) of this paragraph: is not subject to the provisions of subsections (a), (b), (c), and (f) of this section; and shall be reduced by the amount of any appropriation from the General Fund to the special fund that: exceeds the required appropriation under this paragraph; is identified as an appropriation for reimbursement under this paragraph; and supplements rather than supplants the Department of Natural Resources funding for the critical maintenance of State projects on State lands, based on the average critical maintenance budget of the 10 years preceding the appropriation. For fiscal year 2023, the Governor shall include in the annual budget bill a General Fund appropriation in the amount of $2,500,000 to the Maryland Agricultural and Resource–Based Industry Development Corporation for the Next Generation Farmland Acquisition Program authorized under § 10–523(a)(3)(ii) of the Economic Development Article. For fiscal year 2025 only, the Governor shall include in the annual budget bill a General Fund appropriation in the amount of $2,735,000 to the Maryland Agricultural and Resource–Based Industry Development Corporation established under Title 10, Subtitle 5 of the Economic Development Article to be used as follows: $2,300,000 to support the Corporation’s rural business loan programs and small matching grant programs; and $435,000 for grants and near–equity investments to: support the creation or expansion of agricultural product aggregation and storage sites; and II.    facilitate participation in the Certified Local Farm and Fish Program. For each of fiscal years 2024, 2025, and 2026, the Governor shall include in the annual budget bill a General Fund appropriation of $500,000 to the Urban Agriculture Water and Power Infrastructure Grant Fund established under § 2–2103 of the Agriculture Article. For fiscal year 2027, the Governor shall include in the annual budget bill a General Fund appropriation of $400,000 to the Urban Agriculture Water and Power Infrastructure Grant Fund established under § 2–2103 of the Agriculture Article. The appropriations required under subparagraph (i) of this paragraph: are not subject to the provisions of subsections (a), (b), (c), and (f) of this section; shall be allocated as provided in subsection (d) of this section and § 5–903 of the Natural Resources Article; and shall be reduced by the amount of any appropriation from the General Fund to the special fund that: exceeds the required appropriation under this paragraph; and is identified as an appropriation for reimbursement under this paragraph. Except as provided in paragraph (3) of this subsection, if an appropriation or a transfer from the special fund to the General Fund occurs after the fiscal year ending June 30, 2018, the Governor shall include in the annual budget bills for each of the 3 successive fiscal years following the fiscal year in which a transfer is made a General Fund appropriation to the special fund equal to one–third of the cumulative amount of the appropriation or transfer from the special fund to the General Fund for the applicable fiscal year. The appropriation required under paragraph (1) of this subsection: represents reimbursement for the cumulative amount of any appropriation or transfer from the special fund to the General Fund for the applicable fiscal year; is not subject to the provisions of subsections (a), (b), (c), and (f) of this section; shall be allocated as provided in subsection (d) of this section and § 5–903 of the Natural Resources Article; shall be made until the cumulative total appropriated under paragraph (1) of this subsection is equal to the cumulative amount of any appropriation or transfer from the special fund to the General Fund for the applicable fiscal year; and shall be reduced by the amount of any appropriation from the General Fund to the special fund that: exceeds the required appropriation under this subsection; and is identified as an appropriation for reimbursement under this subsection. The appropriation required under paragraph (1) of this subsection does not apply to transfers from the special fund to the General Fund that occur in fiscal years 2026 through 2029. The distributions required under this subsection may not be utilized or considered for the purposes of calculating any allocation or appropriation under subsection (f) or (g) of this section. Notwithstanding any other provision of law, the Governor may transfer funds from the special fund established under this section to the General Fund as follows: on or before June 30, 2014, $89,198,555; for the fiscal year beginning July 1, 2014, $144,188,544; for the fiscal year beginning July 1, 2015, $115,366,700; for the fiscal year beginning July 1, 2016, $62,771,000; and for the fiscal year beginning July 1, 2017, $46,028,000.