Patricia is purchasing a vacation home in Talbot County, Maryland for $550,000. She already owns a primary residence in another state and does not qualify as a first-time homebuyer. Which of the following statements correctly describes how the Maryland state transfer tax is typically allocated between buyer and seller when no special exemption applies and the parties have not negotiated otherwise?
Correct Answer
A) The buyer and seller each pay one-half of the total state transfer tax, splitting the 0.5% rate equally.
Under Md. Code Ann., Tax-Prop. § 13-203, when no special exemption applies (such as the first-time homebuyer reduction), the Maryland state transfer tax of 0.5% is customarily split equally between buyer and seller, with each party paying 0.25% of the consideration. This equal split is the standard default allocation in Maryland for non-exempt transactions.
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Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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