Big change for Maryland refinances involving non-principal residences

Until recently, Maryland treated refinances of principal residences and other properties differently.

A borrower refinancing a principal residence paid recordation taxes on the difference between the outstanding principal balance of the existing loan and the face amount of the new loan. However, for non-primary residences (and for commercial property) a borrower paid recordation taxes on the full amount of the new loan.

A new law removes that distinction. All refinances are treated the same, with recordation tax assessed only on the difference between the outstanding principal balance of the existing loan and the face amount of the new loan. The law is effective for all mortgages recorded on or after July 1, 2013.