Maryland first-time homebuyer state transfer tax exemption: Denied!
If you are purchasing a home in Maryland as a “first-time homebuyer,” and you intend to take title in the name of your revocable trust, or another type of entity, you can forget about realizing the benefit of the Maryland First-Time Homebuyer State Transfer Tax Exemption.
That’s because the Maryland State Transfer Office will only honor the exemption to individuals; specifically, all individuals taking title to the property must be “First-Time Homebuyers” in Maryland in order to qualify for the exemption.
Now the truth is that most mortgage lenders discourage homebuyers from taking title in the name of a trust or other legal entity with the purchase of a residential, owner-occupied, property.
However, in some cases, a homebuyer may be counseled by their attorney to seek an exception from the mortgage lender and to vest title in the name of a revocable trust – a common estate planning vehicle.
In Maryland, for first-time homebuyers, this advice will cost the homebuyer the benefit of the state transfer tax exemption; an amount equal to 0.025% of the purchase price.
- Tags: Agents | Deed Transfers | First-time Homebuyers | Government | Legislation | Maryland | Revocable Trust