Do I have to pay taxes on an inherited house in Prince George's County?

If you own a house in Prince George's County, MD and you are dealing with inherited property, this page covers what actually happens next — the local timeline, what it costs, and the options that stay open to you. Everything below is specific to Prince George's County and how sales are handled in MD, not generic national advice.

Direct Answer

In Prince George’s County, Maryland, you do not have to pay inheritance tax if you are a close relative, such as a child, spouse, or sibling of the person who passed away. However, Maryland is unique because it is the only state that has both an inheritance tax and an estate tax, meaning you might still owe taxes if the total value of the home and other assets is very high or if you are a more distant relative like a cousin or a friend.

Key Details

When you inherit a house in Prince George’s County, there are four main types of taxes you need to know about.

1. Maryland Inheritance Tax

Maryland charges a 10% tax on the value of property you inherit. The good news is that most people are exempt from this tax. Under Maryland law (Tax-General Code § 7-203), you do not pay this tax if you are the deceased person’s spouse, child, stepchild, grandchild, parent, grandparent, or sibling. You also don't pay it if you are the spouse of a child or a lineal descendant. If you are a niece, nephew, cousin, or friend, you will likely have to pay 10% of the home’s value to the Register of Wills.

2. Maryland Estate Tax

Unlike the inheritance tax, which is paid by the person receiving the house, the estate tax is paid by the estate itself before you get your share. For 2024 and 2025, the Maryland estate tax exemption is $5 million. This means if the total value of everything the person owned (house, bank accounts, cars, etc.) is less than $5 million, no state estate tax is owed. If it is more, the rate can go up to 16%.

3. Capital Gains and the ‘Stepped-Up Basis’

If you decide to sell the house later, you might worry about income taxes on the profit. Fortunately, you get a ‘stepped-up basis.’ This means the IRS treats the house as if you bought it for its fair market value on the day the owner died. For example, if your parents bought the house for $50,000 in 1980, but it is worth $450,000 when you inherit it, your ‘tax basis’ is $450,000. If you sell it for $460,000 a few months later, you only pay taxes on the $10,000 profit, not the huge growth from 1980.

4. Property Taxes

Once the title is in your name, you are responsible for the annual property taxes in Prince George’s County. You should also check if the previous owner had a ‘Homestead Tax Credit.’ This credit caps how much the taxable value can go up each year. If you move into the house as your primary residence, you must re-apply for this credit in your own name to keep your taxes low.

MD-Specific Laws

Probate Process and Thresholds

In Maryland, the legal process of transferring a dead person's property is called probate. The process depends on the value of the assets:

• Small Estate: If the property is worth $50,000 or less (or $100,000 or less if a surviving spouse is the only heir), you can use a simplified, faster process called ‘Small Estate Administration’ (Md. Code, Estates and Trusts § 5-601). Since most houses in Prince George's County are worth more than $50,000, you will likely need the ‘Regular Estate’ process.
• Regular Estate: This involves more paperwork and usually takes 6 to 12 months to complete.

Transfer-on-Death Deeds (New Law)

As of October 1, 2024, Maryland joined many other states by passing the ‘Maryland Uniform Real Property Transfer on Death Act’ (HB 472 / SB 651). This allows homeowners to sign a deed that names a beneficiary who will automatically get the house when the owner dies without having to go through the probate court. If your loved one set this up before they passed, the transfer of the house could be much faster and cheaper.

Prince George's County Local Context

Register of Wills

The main office for handling inherited property in the county is the Prince George's County Register of Wills. They are located at: Address: 14735 Main Street, Room D4001, Upper Marlboro, MD 20772 Phone: (301) 952-3250 You must make an appointment before visiting. They provide the forms you need to open an estate and will calculate the inheritance tax if you are a non-exempt relative.

County Tax Credits

Prince George's County offers several local property tax credits that you should investigate:

• Homestead Tax Credit: If you make the inherited house your main home, you must file an application with the State Department of Assessments and Taxation (SDAT) to limit future tax increases. The county cap is typically 5% per year.
• Senior Property Tax Credit: Under a local bill (CB-007-2024), seniors over 65 who have lived in their home for at least 25 years (and the home is valued at $500,000 or less) may qualify for a 20% property tax credit. If you are a senior inheriting a long-time family home, you should check your eligibility with the Office of Finance.

What You Can Do Right Now

1. Find the Will: Look for the original, signed Last Will and Testament. If there isn't one, Maryland's ‘intestacy’ laws will decide who gets the house.
2. Get an Appraisal: Hire a professional appraiser to find out the ‘fair market value’ of the house on the day the person died. This is crucial for your ‘stepped-up basis’ and for the court records.
3. Visit the Register of Wills: Call the Upper Marlboro office to schedule an appointment. Bring the death certificate and the original will if you have it.
4. Check the Deed: See if the deed was ‘Joint Tenants with Right of Survivorship’ or if there was a ‘Life Estate Deed.’ If so, the house might already belong to you without needing probate.
5. Apply for the Homestead Credit: If you plan to live in the house, go to the Maryland SDAT website and file the Homestead Tax Credit application immediately after the title is transferred to your name.