Robert sold his Maryland home three years ago and has been renting since then. He is now purchasing a new home in Howard County, Maryland for $480,000 as his principal residence. His agent tells him he may qualify for the first-time homebuyer transfer tax benefit. Which of the following is the most accurate statement about Robert's eligibility?
Correct Answer
A) Robert does not qualify because he previously owned a home in Maryland within the last seven years.
Under Md. Code Ann., Tax-Prop. § 13-203(b), a buyer qualifies as a first-time homebuyer for the reduced transfer tax rate only if they have NOT owned a principal residence in the preceding seven years. Robert sold his home three years ago, which is within the seven-year lookback period. Therefore, Robert does NOT qualify for the reduced 0.25% rate, and the standard 0.5% rate with an equal split between buyer and seller applies.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
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