A Maryland buyer's agent is working with a client who is purchasing a home for $600,000. The buyer previously owned a vacation cabin in West Virginia but has never owned a principal residence anywhere. The buyer intends to use the Maryland property as his primary home. The buyer asks whether he qualifies for the Maryland first-time homebuyer reduced transfer tax rate. Which of the following is the most accurate response?
Correct Answer
C) The buyer qualifies because he has never owned a principal residence, and the Maryland definition focuses on principal residence ownership, not ownership of any real property.
Under Md. Code Ann., Tax-Prop. § 13-203(b), the first-time homebuyer reduced transfer tax rate is available to a buyer who has not owned a PRINCIPAL RESIDENCE within the preceding seven years. The statute focuses specifically on principal residence ownership, not on ownership of any type of real property. Because the buyer owned only a vacation cabin (not a principal residence) in West Virginia, he has never owned a principal residence and qualifies for the reduced 0.25% rate and the benefit of the seller paying the full 0.5%.
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