Kevin and Lisa are purchasing a home in Howard County for $480,000. Kevin and Lisa are not first-time homebuyers. Maryland's state transfer tax rate is 0.5% and Howard County's recordation tax rate is $2.50 per $500 of consideration (or fraction thereof). What is the combined total of the state transfer tax and the county recordation tax for this transaction?
Correct Answer
B) $4,800
The state transfer tax is $480,000 x 0.005 = $2,400. Howard County recordation tax at $2.50 per $500 uses 960 units ($480,000 / $500), so the recordation tax is 960 x $2.50 = $2,400. The combined total is $2,400 + $2,400 = $4,800. The correct answer is B.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
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