Q: There is a one page addenda called the First-time Maryland homebuyer Transfer and Recordation Tax Addendum. Section III
Under Section III, we said buyer and seller to pay equally. Do we split .25% if the buyers qualify as a first-time homebuyer. Or, does the seller pay the .25%. If you cannot answer, please refer this question to a real estate attorney. I have been trying to get an answer for hours! It is a standard form!
A:
There are 3 different transfer and recordation taxes in Maryland.
One of these taxes (state transfer) is .5% and is affected by the status of the buyer as a 1st time homebuyer. That tax is dropped in 1/2 to .25% for a first time homebuyer, and the Seller must pay ALL of that tax.
With respect to the other 2 transfer / recordation taxes, the parties can decide how to allocate - if the contract says split equally, then the other 2 taxes (which rates vary from county to county) are split in half. Note that these other taxes may be 1-2.5% of the total purchase price (again, it varies by county and some counties have rules that allow a different tax rate on a portion).
Your title company should be able to provide a breakdown of the total taxes. The local county should also be able to confirm tax rates.
While not legal advice specific to your situation I hope that this general information on taxes helps.
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