News/Blogs

2013   •   2012   •   2011   •   2010

May 22nd, 2012

IMPORTANT CHANGE TO RECORDATION TAXES IN MARYLAND.

For years, borrowers in Maryland avoided paying recordation taxes by using an Indemnity Deed of Trust (IDOT). In the IDOT structure, the property owner would guaranty the payment obligations of the borrower, and would sign an IDOT to secure the guaranty. In accordance with a Maryland Attorney General's opinion from the 1970's, the IDOT is not subject to Recordation Tax. Legislation expected to be signed today known as the Budget Reconciliation and Financing Act will eliminate the recordation tax exemption for IDOTs of $1,000,000 or more effective July 1, 2012. This will significantly increase the cost of refinancing transactions of $1,000,000 or more in Maryland.

 

back to news