Governor Signs Short Sale Tax Prohibition Legislation
On May 20th, Governor Martin O'Malley signed hundreds of bills into law. Summaries of several real estate bills he signed are listed below, including three MAR priorities: legislation prohibiting the taxation of forgiven debt in short sales; legislation giving small businesses the ability to pay property taxes semiannually; and legislation regulating real estate teams.
HB 590/SB 657 – Taxation of Forgiven Debt in Short Sales
STATUS: PASSED – Effective May 20th, 2010.
Clarifies that recordation and transfer taxes may not be imposed on the forgiven debt in short sale transactions. Three counties (Anne Arundel, Prince George’s and Montgomery) began levying recordation taxes on the forgiven debt in short sale transactions at the end of 2009. MAR initially sought an opinion from the Attorney General regarding this practice. Maryland Attorney General Doug Gansler released that opinion at MAR’s Legislative Day confirming that recordation taxes cannot be levied on the forgiven debt. HB 590/SB 657 strengthen his opinion and make clear that transfer taxes may not be imposed either.
HB 484/SB 1083 – Semiannual Payment Schedule – Small Business Property
STATUS: PASSED – Effective October 1, 2010 for tax years beginning after June 30, 2011.
Requires local governments to provide a semiannual payment schedule for small business property. Currently, local governments only provide the semiannual payment schedule for residential property. A small business property is defined as a property assigned a commercial use code by the State Department of Assessments and Taxation and for which the annual property taxes do not exceed $50,000.
HB 199/SB 520 – Homestead Property Tax Credit – Federal Government Employees
STATUS: PASSED – Effective June 1, 2010 for tax years beginning after June 30, 2010
Extends the Homestead Property Tax Credit to federal employees stationed outside Maryland for a period not exceeding 6 consecutive years. Once the homeowner moves back to Maryland, the homeowner may reclaim the credit which will be calculated as if the credit had not been lost during the homeowner’s out-of-state residency.
HB 406 – Real Estate Licensees – Services Provided through Teams
STATUS: PASSED – Effective October 1, 2010
Regulates real estate teams and groups. It defines a real estate team as two or more associate brokers or licensed salespersons who work together on a regular basis to provide real estate brokerage services; who represent themselves to the public as being party of one entity; and who designate themselves a collective name such as a team or group. Each team must designate a team leader who has at least three years experience as a licensee. The team leader is responsible for supervising other team members and ensuring that the team adheres to all office rules, practices, and procedures established by the broker and or branch office manager. Advertisements for the team must include the name of the brokerage, the name of at least one licensed team member, and a telephone number of the broker or branch office manager.
HB 472 – Foreclosure Mediation
STATUS: PASSED – Effective July 1, 2010
Establishes a mediation process for homeowners facing foreclosure. Requires lenders to provide information detailing the lender’s efforts to avoid foreclosure with the homeowner. If the lender has not completed its consideration of foreclosure alternatives, the legislation provides a process for that to occur even after a foreclosure has been filed with the court. Allows a homeowner to opt for foreclosure mediation if the homeowner does not believe he/she was fairly considered for foreclosure alternatives. Provides additional funding for housing counselors to assist homeowners.
HB 711/SB 654 – Tenants in Foreclosure
STATUS: PASSED – Effective June 1, 2010
Largely conforms tenant disclosure legislation passed last year to the new federal Helping Families Save Their Homes Act (Public Law No: 111-22). While Maryland law only required lenders and foreclosure purchasers to give notice to tenants living in foreclosed property, the federal law actually extends tenant leases for at least 90 days after a foreclosure sale. HB 711/SB 654 gives tenants the same rights under Maryland law which exist in the federal law. However, unlike the federal law which terminates at the end of 2012, the state law has no automatic termination date.
HB 1399 – Required Notice of Housing Counseling Programs and Services
STATUS: PASSED – Effective January 1, 2011 contingent upon the adoption of regulations
Requires a lender to provide a borrower written notice recommending that the borrower complete homebuyer education or housing counseling and information about such programs. Lenders who must already refer borrowers to housing counseling are exempt. The law is effective January 1, 2011 contingent upon regulations being adopted before October 1, 2010 by the Department of Housing and Community Development (DHCD). If the regulation is not passed by October 1, 2010, the law does not take effect until 60 days after DHCD certifies adoption of the regulations to the Department of Legislative Services.
HB 475 – Sustainable Communities Act
STATUS: PASSED – Effective June 1, 2010
Extends for three years the Maryland Heritage Structure Rehabilitation Tax Credit and renames it as the Sustainable Communities Tax Credit. The bills would permit certain non-historic structures (such as transit oriented development, BRAC enterprise zones) to claim a reduced credit (10 percent of rehabilitation costs). Historic structures can still claim a credit for 20 percent of certified costs, and a 25 percent credit could be claimed for historic renovations which comply with LEED certification. Funding for the credits is capped, so not every eligible property will receive the credit.
If you are thinking of buying or selling real estate in Garrett County or Deep Creek Lake, Maryland, call Jay Ferguson of Railey Realty for all of your real estate needs! 877-563-5350
Posts
No comments:
Post a Comment