Buying Before You Sell in Maryland: The Whole Picture
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
Everything a Maryland homeowner needs before making an offer, in the order the decisions actually arrive. Two of them are state-specific and both cost money.
One: price the recordation tax before you pick a structure
Maryland is unusual in taxing the act of increasing your debt. Md. Tax-Property 12-108(e) subjects a supplemental instrument of writing to recordation tax to the extent that actual consideration is payable on it or the amount of unpaid outstanding principal debt is increased by it. The 12-108(g) refinancing exemption reaches only the unpaid principal of the mortgage being refinanced, by the original mortgagor.
So of the three ways to fund a Maryland purchase before the current home sells, only the equity route carries this tax, and it carries it on the new money. Rates are county-set. Detail on the recordation tax page.
Two: assume the homestead cap is gone
Md. Tax-Property 9-105 caps growth in the taxable assessment of an owner-occupied principal residence, at 110% for State tax and at a county-set figure between 100% and 110% in 1 percentage point increments.
The credit is unavailable for a taxable year where, during the previous taxable year, the dwelling was transferred for consideration to new ownership. Your purchase is exactly that. Whatever the seller's bill shows, underwrite on the current assessment. And file your own application by June 30 for the following taxable year, since a late filing may disqualify you for that year. See the homestead reset page.
Three: check which side of the Washington line your county is on
Maryland's 2026 one-unit conforming limit is $1,249,125 in Montgomery, Prince George's, Frederick and Charles counties, all in CBSA 47900, and $1,209,750 in Calvert. The other 19 jurisdictions are at $832,750: Allegany, Anne Arundel, Baltimore County, Baltimore City, Caroline, Carroll, Cecil, Dorchester, Garrett, Harford, Howard, Kent, Queen Anne's, Somerset, St. Mary's, Talbot, Washington, Wicomico and Worcester.
Howard County is at the baseline, $416,375 below Montgomery next door. The line follows the metropolitan area, not local wealth. See the jumbo page.
Four: pick the structure
Carry both and recast, borrow against the departing home's equity, or keep it and rent it. The structures page compares them, including which ones trigger the recordation tax.
The rental-income rules changed in September 2026
Fannie Mae Selling Guide B3-3.8-05, dated 09/02/2026 under Announcement SEL-2026-08:
- A primary residence being vacated and converted to an investment property when the borrower buys a new primary residence is eligible.
- The lender must document a current housing payment to use any departing-residence rental income.
- Documentation is a complete appraisal with market rents, a Form 1007 rent schedule, or market analysis tools with at least three comparable rentals from the same market area where possible.
- Lease agreements are not permitted for any departing residence.
- Adjusted net rental income is gross rent times 75% less that property's PITIA. Positive offsets that PITIA only; negative is added to the debt-to-income ratio.
- Six months of reserves for the vacated property's PITIA under 12 months of property management experience.
Mechanics on the Form 1007 page, Maryland specifics on the rental conversion page.
Where in Maryland you are moving
Maryland's large markets were flat in August 2026 and its small ones were moving. Read the move-up market page, then Baltimore, Montgomery County, Howard and Anne Arundel, the Eastern Shore or Western Maryland.
Two situations with different answers
Under contract but not closed and listed but not sold have their own pages.
Frequently asked questions
What should a Maryland homeowner check first before buying the next house?
Two state-specific costs. Whether the structure you are considering triggers recordation tax on new money under Md. Tax-Property 12-108(e), and the fact that the Homestead Tax Credit cap does not transfer, so the new home is assessed without it under 9-105.
What are the 2026 conforming loan limits in Maryland?
$1,249,125 on one unit in Montgomery, Prince George's, Frederick and Charles counties, $1,209,750 in Calvert County, and $832,750 in the other 19 Maryland jurisdictions including Howard, Anne Arundel, Baltimore County and Baltimore City.
Why is Howard County not a high-cost county?
Because conforming limits follow the metropolitan area a county sits in rather than local wealth or prices. Montgomery, Prince George's, Frederick and Charles are in the Washington metropolitan area (CBSA 47900) and get $1,249,125; Howard is at the $832,750 baseline, a gap of $416,375.
Did the rules for using rental income from a departing residence change?
Yes. Fannie Mae Selling Guide B3-3.8-05 is dated 09/02/2026 under Announcement SEL-2026-08. Lease agreements are no longer permitted for any departing residence, qualifying income is gross rent times 75% less that property's PITIA as an offset only, and six months of reserves apply under 12 months of property management experience.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Maryland recordation tax rates are set by each county and Baltimore City, and the Homestead Tax Credit is administered by the State Department of Assessments and Taxation; your county finance office, your CPA or a Maryland attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.