Tax Break for Police Homebuyers

I serve on the Prince George’s County Association of REALTORS® Legislative and Political Affairs Committee and I’m very proud of the following legislation that benefits our county and municipal police officers. We worked vigorously to move this legislation through the 2006 Maryland General Assembly. Governor Erlich signed the bill into law on May 2, 2006.

The new law takes effect July 1, 2006. If you qualify for this tax break, be sure to let your real estate agent or title company know in advance of settlement.

I. POLICE FIRST TIME HOMEBUYERS – Eliminates the County transfer tax of 1.4% for Prince George’s County Police Officers and municipal Police Officers serving local communities in the County WHO ARE FIRST TIME HOMEBUYERS.

II. Police Homeowners – Reduces the County transfer tax from 1.4% to 1% for County Police and Municipal Police who currently own homes and wish to purchase a new residence.

TO QUALIFY:

  • The purchase property must be improved residential property located in Prince George’s County, Maryland.
  • At least one of the Purchasers must be employed as a Prince George’s County Police Officer or a municipal corporation police officer serving in Prince George’s County.
  • The police officer must reside in the property as his/her principal residence.
  • Qualified purchasers must maintain their employment as County Police Officers or Municipal Police Officers for three years following the purchase or they will be required to repay the tax.
  • Applicable to settlements occurring after July 1, 2006.

POTENTIAL TAX SAVINGS:

Given an Average Sale Price of $355,034 (March 2006)
Police First Time Homebuyers: $355,034 x 1.4% = $4,970.48 Tax Savings
Police Homeowners: $355,034 x 0.4% = $1,420.14 Tax Savings

© 2006 Susan Pruden.

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