Maryland Reporting a Transfer of a Controlling Interest in a Real Property Entity is a process that requires the filing of a Certificate of Transfer with the Maryland Department of Assessments and Taxation (SEAT). The purpose of this document is to report any transfer of a controlling interest in a real property entity, such as a corporation, limited liability company, partnership, or trust. This document must be signed by the transferor and the transferee and must include the following information: the name of the transferor, the name of the transferee, the legal description of the property, the date of the transfer, and the value of the controlling interest. Depending on the type of entity, there are two types of Maryland Reporting a Transfer of a Controlling Interest in a Real Property Entity: the Corporate Transfer Certificate and the Qualified Transfer Certificate. The Corporate Transfer Certificate is used for the transfer of a controlling interest in a corporation, while the Qualified Transfer Certificate is used for the transfer of a controlling interest in a limited liability company, partnership, or trust. Upon filing, the transferor and the transferee must also pay a filing fee.
Maryland Reporting a Transfer of a Controlling Interest in a Real Property Entity
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How to fill out Maryland Reporting A Transfer Of A Controlling Interest In A Real Property Entity?
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FAQ
What is a controlling interest transfer? A controlling interest transfer occurs when there is a 50% or more change of ownership in an entity. If that entity owns real property in Washington, a controlling interest transfer return is required to be completed within 5 days of the completed transfer.
Maryland's controlling interest statute, contained in Section 12-117 of the Tax-Property Article of the Annotated Code of Maryland (the "Statute"), imposes tax on the sale of an interest in an entity that owns real estate if two conditions exist.
The tax is usually paid as part of closing costs at the sale or transfer of property. Residential Type 1 or Type 2 sales or transfers: If the consideration is $500,000 or less, the rate is 1% of the consideration. If the consideration is more than $500,000 the rate is 1.425%
An option or contract to purchase real property is an interest in real property. Therefore, the transfer or acquisition of a controlling interest in an entity that holds an option or contract to purchase real property results in a conveyance of an interest in real property that is subject to tax.
The tax rate for documents that transfer an interest in real property is $. 70 per $100 (or portion thereof) of the total consideration paid, or to be paid, for the transfer.
Maryland law requires all deeds to include the names of the grantor (the seller) and grantee (the buyer), a description of the property, and the interest that you intend to convey. All deeds must be recorded with the Department of Land Records in the county where the property is located.
Background of the Tax on Transfers of Controlling Interests When real property is bought and sold in Maryland and a deed is recorded, recordation and transfer taxes are imposed. These taxes range from about 1% of the consideration in some counties to 3% in Baltimore City.
For example, in Illinois the real estate transfer tax is imposed on the transfer of a controlling interest, which is defined as more than 50 percent of the fair market value of all ownership interests or beneficial interests in a real estate entity.