Robert purchased a home in Baltimore County in 2020 for $350,000 as a first-time homebuyer. In 2025, he sells the property to Angela, who is also a first-time homebuyer purchasing it as her principal residence. The agreed sale price is $420,000. Regarding the Maryland state transfer tax, which statement correctly describes the tax obligation?
Correct Answer
D) Robert pays 0.25% on Angela's behalf because Angela is a first-time homebuyer
Under Maryland Tax-Property Article § 13-203, when the buyer qualifies as a first-time homebuyer purchasing a principal residence, the state transfer tax rate is reduced to 0.25% of the consideration, and the responsibility for paying this reduced tax shifts to the seller. Therefore, Robert (the seller) pays 0.25% × $420,000 = $1,050 on Angela's behalf. Angela, as the first-time homebuyer, owes no state transfer tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
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