Home / Capital Gains Tax in Maryland
Capital Gains Tax in Maryland
By Priya Raman
Local income tax can push this well past the state number.
Local income tax can push this well past the state number.
Maryland's 5.75% top state income tax rate applies to capital gains, bringing the base combined figure on an investment property sale to 29.6% (20% federal + 3.8% NIIT + 5.75% state). County-level income taxes sit on top of that and aren't included in the 29.6%.
Maryland treats capital gains as ordinary income, so the state's 5.75% top bracket applies directly to a property sale, no separate lower rate. Counties layer their own income tax on top, which the 29.6% combined figure doesn't capture. Get a fuller estimate, depreciation recapture included, from the capital gains tax calculator.
A 1031 exchange defers the state, federal, and NIIT portions, plus whatever county tax would otherwise apply, by reinvesting the full proceeds into a replacement property. Build out the numbers in the 1031 exchange calculator, then confirm your identification and closing deadlines using the timeline calculator.
Before selling in Maryland, walk through the 45- and 180-day timeline rules and what counts as like-kind property under Section 1031.