3 Great Maryland Tax Incentives and Homeownership Programs
In 2018, first-time homebuyers made up 33% of total homebuyers in the United States. Maryland continues to see home appreciation rates increase, meaning a home is still a solid investment. However, this also means that buying a home in Maryland can be costly.
Luckily, the state of Maryland offers homebuyers three great programs to make the process easier.
State Transfer Tax Exemption
If you have never owned property in Maryland and are purchasing a home that will be your principal residence, you are eligible for first-time homebuyer discount at closing. This discount exempts you from paying your portion of the State Transfer Tax (0.25% of the Sales Price).
All buyers taking title must be first-time homebuyers in order to qualify for this exemption, although there is a small exception. Co-guarantors who are not first-time homebuyers can sign a form to indicate that they are only taking title to guaranty the loan. This is common where a parent is a co-signer on a loan but will not live in the property. In this limited situation, the other buyer can still obtain the tax discount. The buyers will all sign an affidavit at closing to confirm their statuses as first-time Maryland homebuyers. Smart Settlements will automatically prepare this for you when your sales contract indicates that you are a Maryland first-time buyer.
Maryland Homestead Tax Credit Eligibility
The Homestead Tax Credit limits the amount of assessment increase to no more than 10% annually on homes which have been designated as a principal residence. A person or married couple may only have one principal residence. After the purchase of your Maryland home and after the deed is on record, the Department of Assessment and Taxation will mail the homeowner the homestead application. If the property is your principal residence, complete the form then submit via fax or mail. For more information or to download the application, visit this link.
Prince George's County Lift Home Purchase Assistance Program
DISCLAIMER: The information gathered here is deemed reliable as of the date of publication, but each aforementioned agency has the right to change its information, rates, and processes. Contact each organization for specific answers and the most updated information.
For additional information on this topic contact Evelyn Miller, Partner, at 202-753-7400.
