Real Prop. § 14-104. Recordation, transfer taxes; sharing; first-time home buyers

(a) In this section, “first-time Maryland home buyer” means an individual who has never owned in the State residential real property that has been the individual’s principal residence.
(b) Except as provided in subsection (c) of this section, in every written or oral agreement for the sale or other disposition of property, it is presumed in the absence of a contrary provision in the agreement or the law, that the parties to the agreement intended that the cost of any recordation tax or any State or local transfer tax shall be shared equally between the grantor and grantee. This section does not apply to mortgages or deeds of trust.

(c)(1) The entire amount of recordation tax and local transfer tax shall be paid by the seller of improved, residential real property that is sold to a first-time Maryland home buyer who will occupy the property as a principal residence, unless there is an express agreement between the parties to the agreement that the recordation tax and local transfer tax will not be paid entirely by the seller.(2) The entire amount of State transfer tax shall be paid by the seller of improved, residential real property that is sold to a first-time Maryland home buyer who will occupy the property as a principal residence.(3) This subsection does not apply to tax sales of property under Title 14, Subtitle 8 of the Tax-Property Article.(4) If there are two or more grantees, this subsection does not apply unless each grantee is a first-time Maryland home buyer or a co-maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in § 12-108(i) of the Tax-Property Article for the property and the co-maker or guarantor will not occupy the residence as the co-maker’s or guarantor’s principal residence.(5) Paragraphs (1) and (2) of this subsection apply only if each grantee or anagent of the grantee provides a statement that is signed under oath by the grantee or agent of the grantee stating that:(i) 1. The grantee is a first-time Maryland home buyer as defined under subsection (a) of this section; and

2. The residence will be occupied by the grantee as the grantee’s principal residence; or(ii) 1. The grantee is a co-maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in § 12-108(i) of the Tax-Property Article for the property; and

2. The grantee will not occupy the residence as the co-maker’s or guarantor’s principal residence.(6) A statement under paragraph (5) of this subsection by an agent of a grantee shall state that the statement:(i) Is based on a diligent inquiry made by the agent with respect to the facts set forth in the statement; and(ii) Is true to the best of the knowledge, information, and belief of the agent.

Question
What are first time home buyers’ obligations in terms of transfer taxes in the state of Maryland?

Response
My understanding is that your .25% is waived and the sellers portion had to be paid by the seller if not stipulated otherwise in the contract.  The State is giving you a waiver of taxes therefore the seller is unable to put their side of the obligation on you, a first time MD homebuyer as traditionally transfers are split 50/50…the section of the code you have below suggest you will have to pay the sellers portion of the transfer though.  Your contract with the builder probably states that it is the buyers’ obligation to pay all transfer taxes.  The code below says the seller pays their portion “unless there is an express agreement between the parties to the agreement that the recordation tax and local transfer tax will not be paid entirely by the seller.” 

I’m not an attorney or title agent but it would seem to me that if this clause is present in your contract, and I’m pretty sure it is, you will still have to pay the .25% normally allocated to the seller.  I know a Loan Officer that used to work for — Mortgage which is owned by — Homes.  He says that in the contracts, the .25% is paid by the buyer out of the closing allowance given by the seller.  Hope this helps you!