Maryland Commercial Real Estate Loans: Transfer & Recordation Tax

Commercial property loans in Maryland use the same programs as every other state — SBA 504, DSCR loans, bridge loans, bank and life-company permanent loans. What Maryland changes is that closing taxes are stacked on the deed — a state transfer tax, in most counties a county transfer tax, and a county recordation tax — while the purchase loan itself is exempt; that a refinance pays recordation tax only on new money; that even a power-of-sale foreclosure runs through the circuit court; and that large buildings now face statewide emissions standards, with MD-PACE to help pay for the work.

Up to three taxes on the deed — and what the loan avoids

The state transfer tax is 0.5% of the consideration (Tax–Property § 13-203). Most counties and Baltimore City add their own transfer tax — 0.5% in eight counties, up to 1.5% in Baltimore City and Baltimore County, and Anne Arundel County adds a 0.5% surcharge on specified transactions of $1.0 million or more; a few, including Frederick County, impose none. The recordation tax is also county-set and is charged per $500 of the consideration — or, on a mortgage or deed of trust, per $500 of the debt it secures (§ 12-103). Rates differ widely — $2.50 per $500 in Baltimore and Howard counties, $7.00 in Charles and Frederick counties — and Montgomery County uses a tiered rate that rises with the size of the transaction.

The loan side is lighter than it looks. A purchase-money deed of trust is not subject to recordation tax (§ 12-108(i)), so a buyer who finances the purchase pays recordation tax on the deed, not again on the loan.

Example: a $2,000,000 building in Baltimore County bought with a $1,400,000 loan.

• State transfer tax: $2,000,000 × 0.5% = $10,000
• Baltimore County transfer tax: $2,000,000 × 1.5% = $30,000
• Recordation tax: $2,000,000 ÷ $500 × $2.50 = $10,000
• Recordation tax on the $1,400,000 purchase-money deed of trust: $0
• Total: $50,000

That is more than twice Florida's $21,700 on the same example and about five times Minnesota's $9,820, and the total moves with the county — a building in a 0.5% transfer-tax county with a higher recordation rate comes out differently, so price each deal with that county's rates. Who pays each tax is set in the purchase contract.

Refinancing: the tax follows the new money

When the original mortgagor refinances, the new deed of trust is exempt from recordation tax to the extent it secures no more than the unpaid principal of the existing loan (§ 12-108(g)); since 2013 that covers commercial loans and borrowers that are entities. Anything above the payoff — a cash-out refinance, or a larger loan to fund improvements — is taxed at the county's recordation rate. In Baltimore County, $300,000 of new money would add $300,000 ÷ $500 × $2.50 = $1,500. Put that figure in the sources and uses when you weigh how much cash to take out of a refinance.

Foreclosure goes through the court — even under a power of sale

A Maryland deed of trust usually carries a power of sale, but the sale is not private. The trustee dockets the foreclosure in the circuit court (Md. Rule 14-204), conducts the sale and reports it to the court. Parties then have 30 days to file exceptions, and the court ratifies the sale if it is satisfied the sale was fairly and properly made (Rule 14-305). Post-sale exceptions are limited to irregularities in the sale itself, so a borrower's other objections belong before the sale, not after. If a refinance or sale is the way out of a troubled loan, start before the case is docketed, and read the personal guarantee — and, on a non-recourse loan, the carve-outs that would turn on recourse.

Emissions standards and MD-PACE

Maryland's Building Energy Performance Standards (COMAR 26.28, effective December 23, 2024) cover buildings of 35,000 square feet or more, not counting parking. Owners report energy use through ENERGY STAR Portfolio Manager from 2025; net direct greenhouse gas emissions standards apply from 2030, stepping down to net-zero direct emissions in 2040. Historic buildings, elementary and secondary schools, manufacturing and agricultural buildings and — since a 2025 amendment (HB 49) — hospitals are excluded, and a Montgomery County building that meets the county's own standards is not held to the state's. For a lender, a building that burns gas for heat now has a dated upgrade bill attached, and that belongs in the underwriting.

MDPACE, sponsored by the Maryland Clean Energy Center, is the statewide program that can pay for that work (Montgomery and Prince George's counties run their own C-PACE programs): a county opts in by ordinance, the owner repays through a surcharge on the property tax bill, and the holder of the existing mortgage or deed of trust must consent. C-PACE Desk, a BestLoanUSA site, tracks Maryland's C-PACE status. Bring your current lender in early — without its consent the assessment can't be placed.

Where to start

Choose the program — SBA 504 for an owner-occupied building, a DSCR loan or permanent loan for an income property, a bridge loan for a transition — and add the county's transfer and recordation taxes to the closing budget. Size the loan with the commercial mortgage calculator. For financing that isn't tied to real estate, the Maryland business loan guide covers SBA offices and state programs.

Ready to compare? Start a commercial real estate loan request — one application, compared across our lender network.

💡 BestLoanUSA compares bank, SBA, DSCR and bridge lenders for Maryland commercial property. See how it works — no hard credit pull to start.

Sources: Md. Code, Tax–Property §§ 12-103, 12-108, 13-203; Department of Legislative Services, fiscal notes for HB 790 and HB 82 (2026); Baltimore County, Deed Transfer and Recordation; Frederick County Circuit Court, Recording Fees; Md. Rules 14-204 and 14-305; Maryland Clean Energy Center, MDPACE Program Guidelines; Maryland Department of the Environment, Building Energy Performance Standards (COMAR 26.28) and HB 49 (2025). Checked 2026-10-08.