Marcus and Linda are selling their home in Baltimore County, Maryland for $480,000. The buyer, David, does not qualify as a first-time homebuyer. The Maryland state transfer tax is split equally between buyer and seller. The county recordation tax in Baltimore County is $5.00 per $500 of consideration. How much does Marcus and Linda owe in Maryland state transfer tax only (not including county recordation tax)?
Correct Answer
A) $1,200
Step 1: Calculate total Maryland state transfer tax. Rate = 0.5% (standard rate for non-first-time homebuyer). Total transfer tax = $480,000 × 0.005 = $2,400. Step 2: Since the buyer is not a first-time homebuyer, the tax is split equally between buyer and seller. Seller's share = $2,400 ÷ 2 = $1,200. Marcus and Linda owe $1,200 in Maryland state transfer tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
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