Senate unanimously OKs bill to lower closing costs

March 14, 1995|By Peter Jensen | Peter Jensen,Sun Staff Writer

Homebuyers, particularly those purchasing real estate for the first time, got some relief from the Maryland Senate last night.

The Senate unanimously approved legislation intended to lower closing costs in Maryland. The package of four bills could save a Baltimore County buyer as much as $2,720 on the settlement for a $150,000 home.

The legislation requires counties and municipalities to offer semiannual payment of property taxes, exempts first-time buyers from the buyer's half of state transfer taxes and gives counties the authority to exempt purchasers from local transfer taxes. The Senate voted to create a task force to study the state's prepayment property tax system.

Senate leaders hailed the changes as a potential economic development boon for the state. Business leaders have long claimed that the state's closing costs -- ranked among the highest in the nation -- make it difficult to attract out-of-state companies to Maryland.

The biggest benefit for most homebuyers would come from the changes to the property tax collection. Buyers now must pay 14 months of property tax at settlement. The legislation would reduce that to eight months, which would reduce the cost about $900 on the purchase of a $150,000 Baltimore County home.

The bills now go to the House of Delegates for consideration.

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