Village Settlements logo Return to Quick Links Contact Us

Is your Buyer really a First Time Maryland Homebuyer?


It’s been a little while since we’ve seen people get this wrong, but lately we have seen some interesting interpretations of the law. It is always good to review these important concepts.

Let’s start with the definition of a Maryland First Time Home Buyer. Under Maryland law, a First Time Homebuyer is an individual who has (1) NEVER owned real property in the State of Maryland that was their primary residence and (2) who will live in the property being purchased as their primary residence.

This definition often raises some questions. What if the buyer had previously inherited property in Maryland? What if the buyer owned 25 rental properties, but never lived in any of them? The key fact is not whether the buyer owned a property, or how they acquired it, but rather the question is whether any previously owned property was their principal residence and whether the buyer will be using the new home as their principal residence.

We are often asked if it matters if the Buyer has not lived in Maryland or owned property in Maryland for the past 3 or 5 or 7 or 10 years. Again, the key questions are whether the Buyer ever owned property in Maryland and was that property their primary residence? If yes to both, then they don’t qualify now as a First Time Buyer.

Sometimes we are asked what to do when there is more than one purchaser. The general rule is that all individuals on title must meet the definition of a First Time Maryland Homebuyer in order to get the exemption from the State Transfer Tax. There is an exception if there is a co-signer on the loan, who will also be on the title to the property, but will not occupy the property. The classic example is where Mom and Dad co-sign on a loan to help their child qualify on the loan. In that case, the child would still get the First Time Buyer discount on the State Transfer Tax.

If you are unsure about whether your buyer can get the exemption from the Maryland State Transfer Tax as a First Time Maryland Homebuyer, please contact any of the attorneys at Village Settlements, Inc., one of the area’s best known title companies for three decades. Call us at 301-590-9300 or write an email with your question here: Ask A Question.