A Maryland real estate agent is advising her seller client about the upcoming closing costs on their home sale. The buyer does not qualify as a first-time homebuyer. Regarding the Maryland state transfer tax, which of the following is the most accurate statement about the seller's default obligation?
Correct Answer
B) The seller is responsible for paying one-half of the total state transfer tax, which equals 0.25% of the purchase price.
Under Md. Code Ann., Tax-Prop. § 13-203, in a standard Maryland transaction where the buyer does not qualify as a first-time homebuyer, the 0.5% state transfer tax is customarily split equally between buyer and seller. The seller's default share is therefore 0.25% of the purchase price (one-half of 0.5%). This is the standard allocation absent any contractual negotiation or special exemption.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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