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£ O you are handling the purchase o a new construction home or a home
that has undergone signi icant renovations, a supplemental tax bill is
likely to be issued.
£ Typically, the developer has been paying a tax bill on the land only.
£ State Department o Assessments and Taxation (SDAT) has access to
building permits.
£ Assessors are then responsible or going into the ield and periodically
checking the progress or the permits in his or her assigned area.
£ SDAT adds the new construction value to the assessment roll when the
construction is deemed to be substantially complete.
£ Supplemental bills are based on when the State assesses the dwelling:
£ 3/4 year bill: covers the period October 1st ± June 30th
£ 1/2 year bill: covers the period January 1st ± June 30th
£ 1/4 year bill: covers the period April 1st ± June 30th

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£ A notice rom the State Department o Assessments and Taxation
(SDAT) normally precedes the supplemental tax bill.
£ Receipt o a quarterly assessment notice may also be an indication that
a supplemental bill is imminent.
£ The additional value assessed on the assessment notice by SDAT may
be appealed to the Supervisor o Assessments within 45 days o the
date o the assessment valuation notice.
£ The county issues the supplemental tax bill based on the SDAT
valuation and while the assessment valuation can be appealed, the tax
bill itsel can not be appealed.
£ The supplemental tax bills are mailed only to the homeowner (the bills
are not sent to the lender) and are due within 30 days.
£ Paragraph 23 on Page 7 o the Regional Sales Contract addresses
supplemental tax bills, but is ambiguous.
£ When writing a contract or new construction or a renovated property, it
is recommended that the issue o supplemental tax bills be addressed
in a separate addendum.

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Federal Title & Escrow Company


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£ On !   
, the Montgomery County Council unanimously approved a bill that will require
sellers to provide a potential homebuyer with an estimate o what their actual tax bill will be in the irst ull
year a ter they purchase a home.
£ The bill will take e ect on -    .
£ The new REA disclosure attempts to address this by requiring a copy o the property tax bill to be attached
to the sales contract.
£ The bill requires that any written or electronic material advertising the home in ormation include what a new
owner would owe in estimated property taxes or the irst ull tax year a ter they purchase the home based
on what is available at the time the advertising material is produced.
£ Ô 
      
:
£ next year¶s phase-in value, i known, otherwise the current year¶s phase-in value
£ this year¶s property tax rates (State, County, and municipal)
£ the assumption o no property tax credits
£ The county has provided a Web-based Excel worksheet to determine the estimated taxes at:
http://www.montgomerycountymd.gov/content/ inance/CountyTaxes/On oTaxes/Property_tax_calculation_bill
_24_07.xls
£ To complete the worksheet, you need to get a copy o the property tax bill rom
http://www.montgomerycountymd.gov/ inance and the SDAT record rom http://www.dat.state.md.us/ .
£ Ô     
£ Every July 1, because the tax rates and phase-in values will change; AND
£ On early January, i you used the phase-in value rom the current iscal year instead o the phase-in value or
the next iscal year (the iscal year in Maryland is rom July 1st to June 30th.)
£ Currently, the County law does not apply to the municipalities o Barnesville, Kensington, Poolesville or
Rockville.
Federal Title & Escrow Company
FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
   


Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
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£ Currently, the Recordation tax rate is $3.45
per $500 (or raction thereo ).
£ E ective |   , i the consideration
payable exceeds $500,000, an additional
$1.55 per $500 (or raction thereo ) will be
added to the tax or the amount o
consideration over $500,000.
£ For principal residences, the º  $50,000 o
consideration is still exempt rom the
Recordation tax.

Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
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£ °  O the purchase price or a principal
residence is $750,000. The Recordation tax will be
calculated as ollows:
£ $50,000 exempt or principal residence
£ $450,000 at $3.45 per $500 = $3105
£ $250,000 at $5.00 per $500 = $2500
£ Ô        
j (NOTE: this is the total Recordation tax, which is typically
then split 50/50 between the buyers and sellers).
£ The County Trans er Tax remains unchanged at 1.0%
o the purchase price and the State Trans er Tax
remains unchanged at 0.5% o the purchase price.

Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
Î    
£      º    º  
We didn't think so. O you haven¶t signed up or the
REAL Credit Program, you are allowing your home
buyers to pay hundreds o extra dollars at closing.
£ Years ago Federal Title made a bold move by
eschewing all A iliated Business Arrangements
(ABAs). We decided the money made rom those
arrangements should go to the home buyer, not the
executives o large real estate irms.
£ Federal Title & Escrow Company, through its REAL
CreditΠprogram, has saved home buyers nearly
$1.5 MOLLOON dollars in closing costs.

Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500
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£ ow does it work? Just sign
up online and the next time
you order closing services
or your client, you will save
them up to $900. We send
an email to your client
telling them you saved them
$X dollars.
£ Plus you can track all the
orders you place.
£ For more in ormation, visit:
http:// ederaltitle.com/oneroo _r.aspx
Federal Title & Escrow Company
FederalTitle.com :: 202-362-1500
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£ For your next listing,
don¶t orget to utilize our
Seller¶s Net Proceeds
Calculator.
£ You input the seller¶s
pay-o in ormation,
credits to buyer,
commission etc. and in
seconds we give you an
estimate or your seller.

Federal Title & Escrow Company


FederalTitle.com :: 202-362-1500