Tuesday, January 12, 2010

ALERT: Montgomery County decides to "review" its short sale taxation practice

As we noted here, several Maryland counties, including Montgomery County, planned to charge transfer tax on the unpaid principal balance of the mortgage rather than the sales prices. After hearing from many of us who protested this change, the Transfer Office sent out the following message today:


Dear Clients of the Montgomery County Transfer Office:

We have decided to initiate further review of the Short Sale issue.

Until our review is complete, you may continue to submit Short Sales for processing (at the contract purchase price) as in the past.

Note: If, after further review, the final conclusion is that “consideration” may exceed the Short Sale purchase price, we will give you ample advance notice of this result and the appropriate procedure for calculating “consideration”.


(my emphasis added)

In short, Montgomery County has temporarily suspended its plan to tax on indebtedness, and will tax on the contract price. They may - after review - decide differently, but for now we are operating under the old rules.

Stay tuned....