Code of Maryland Regulations › Title 18 - DEPARTMENT OF ASSESSMENTS AND TAXATION › Subtitle 05 - AGRICULTURAL LAND TRANSFER TAX › Chapter 18.05.01 - Administration › Section 18.05.01.02 - Calculation of Tax and Surcharge - Value Deductions

Current through Register Vol. 51, No. 14, July 12, 2024
A. Under Tax-Property Article, § 13-304, Annotated Code of Maryland, the supervisor is required to deduct from the consideration payable for the instrument of writing the total value, as defined in Tax-Property Article, § 13-301(d), Annotated Code of Maryland, of any improvement on the property before applying the applicable tax rate and surcharge. For this purpose, the supervisor shall deduct only the total value of any structure or other item that is separately assessed on the property's assessment worksheet. For example, a 5-acre parcel transfers for a consideration of $250,000. It is improved with an outbuilding that has a separately itemized value of $175,000 on the property's assessment worksheet. The parcel is also improved with certain site improvements - a driveway, a well, a septic system, and sidewalks - which are all included in the $50,000 land value portion on the assessment worksheet, but are not set out on the worksheet with a separate value for each item. The tax and surcharge are calculated as follows:
$250,000 Consideration
less $175,000 Total Improvement Value
$75,000 Net Consideration
$75,000 X 0.03 = $2,250 Tax
$2,250 X 0.25 = $562.50 Surcharge
$2,812.50 = Total Tax and Surcharge Due
B. Under Tax-Property Article, § 13-304, Annotated Code of Maryland, the supervisor is required to deduct from the consideration payable for the instrument of writing the total value, as defined in Tax-Property Article, § 13-301(d), Annotated Code of Maryland, of any land not subject to the tax and surcharge before applying the applicable tax rate and surcharge. For example, a 10-acre parcel transfers for a consideration of $500,000. One acre of that parcel is a homesite assessed at $100,000 that is not subject to the tax and surcharge. The tax and surcharge are calculated as follows:
$500,000 Consideration
less $100,000 Nonagricultural Land
$400,000 Net Consideration
$400,000 X 0.04 = $16,000 Tax
$16,000 X 0.25 = $4,000 Surcharge
$20,000 = Total Tax and Surcharge Due
C. Both §§A and B of this regulation may apply in the same transaction. For example, a 10-acre parcel transfers for a consideration of $500,000. It is improved with a dwelling that has a separately itemized value of $175,000 on the property's assessment worksheet. The parcel is also improved with certain site improvements - a driveway, a well, a septic system, and sidewalks - which are all included in the land value portion on the assessment worksheet, but are not set out on the worksheet with a separate value or each item. It also includes a 1-acre homesite assessed at $100,000 that is not subject to the tax and surcharge. The tax and surcharge are calculated as follows:
$500,000 Consideration
less $175,000 Improvement Value
less $100,000 Nonagricultural Land
$225,000 Net Consideration
$225,000 X 0.03 = $6,750 Tax
$6750 X 0.25 = $1,687.50 Surcharge
$8,437.50 = Total Tax and Surcharge Due