"Buying Your First Home in Maine: How Does a MaineHousing Loan Take the Transfer Tax Off Your Closing?"

It is closing day on your first home in Maine. The settlement statement, the final list of every charge, is in front of you. The government charges appear near the bottom of the page, and one line that shows up on almost every purchase in the state is missing from yours. The closing agent did not forget it. The state's transfer tax declaration has a box for buyers in a MaineHousing first-time home buyer program, and once that box is checked, the Maine transfer tax leaves your file.

Since November 1, 2025, a Maine deed to a buyer financed through one of MaineHousing's first-time home buyer mortgage loan programs is exempt from the state real estate transfer tax, on the seller's half as well as yours. The closing agent claims it on the transfer tax declaration, so your part is being in the program before you close.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including Maine.

I want to walk you through this one the way I would at your kitchen table. Neither the tax nor the exemption is complicated, but somebody still has to tell the closing agent in time, and I want to be sure you know who that is and when it happens.

What does the Maine transfer tax normally cost a buyer?

Maine charges a real estate transfer tax on each deed that transfers Maine real property. Under 36 M.R.S. § 4641-A, the rate is $2.20 for each $500 of the price, or any part of $500, and the statute places one half of the tax on the seller and one half on the buyer.

That split by statute is unusual, and it is the reason I can tell you your share to the dollar the day you know your price. The Maine mortgage page covers why that is rare and what it means for a Maine purchase contract. On a $300,000 home, the whole tax is 600 units of $500 at $2.20 each, which comes to $1,320, and your half is $660. The seller's half is the same $660.

The tax attaches to the deed. A refinance records a new mortgage without transferring ownership, so it has never reached a refinance, and nothing in the 2025 change touched that.

What changed on November 1, 2025?

The Maine Legislature added a new exemption to the transfer tax statute in 2025. It started as LD 1082, a bill to exempt home buyers using the Maine State Housing Authority's first-time home buyer mortgage loan programs, and it became law through the state's 2025 budget. The exemption is now written into 36 M.R.S. § 4641-C, the section that lists every deed Maine does not tax, as a deed to purchasers who receive financial assistance through the Maine State Housing Authority's first-time home-buyer mortgage loan programs.

The exemption belongs to the deed. Maine Revenue Services' summary of the 2025 law changes states that for transfers on or after November 1, 2025, a deed to a purchaser receiving assistance through those programs is exempt for both the buyer and the seller. So when you buy with a MaineHousing first-time buyer loan, your half goes to zero and so does the seller's half.

The test is MaineHousing's test. The statute does not set up its own definition of a first-time buyer. It keys the exemption to receiving assistance through MaineHousing's first-time home buyer mortgage loan programs, so if MaineHousing counts you in, the deed is exempt, and if MaineHousing does not, the ordinary half-and-half split applies.

Who counts as a first-time home buyer for this exemption?

MaineHousing's own definition is more generous than the name suggests. On its First Home Program questions page, MaineHousing says that if you have not held an ownership interest in your principal home within the past three years, you qualify as a first-time home buyer. You may have owned a home years ago and still fit.

The mortgage program itself is MaineHousing's First Home Loan Program, a fixed-rate mortgage made through lenders MaineHousing has approved to participate. MaineHousing also runs a First Generation program for buyers whose parents never owned a home. Each program carries its own income limits, purchase price limits, a required home buyer education class, and down payment or closing cost help that changes from year to year. I am not printing those figures here, because MaineHousing adjusts them. The current terms are on MaineHousing's pages, and the lender you are working with should confirm which program you fit before you write an offer.

Maine Revenue Services publishes the list of qualifying MaineHousing programs for the closing agent to match against. The deed qualifies when the loan you close with is one of those programs, so your choice of loan program decides whether the exemption applies.

Who actually claims the exemption at closing?

The closing agent does, on the state form. Every Maine deed is recorded with a Real Estate Transfer Tax Declaration, the form Maine Revenue Services uses to collect the tax through the county Registry of Deeds. Maine Revenue Services' Property Tax Bulletin No. 31 explains the declaration and the exemptions, and the form was updated for this one. The closing agent selects the first-time home buyer exemption and enters the matching code, which is listed on page four of the declaration.

You do not sign anything extra and you do not file anything with the state. Your job comes before the form is prepared. The closing agent needs to know, before they prepare the declaration, that your loan is a MaineHousing first-time buyer loan. Your lender's closing instructions usually say so, and it costs nothing to say it yourself when the closing agent first reaches out to schedule you.

How do I plan my cash to close around it?

Cash to close is the money you bring to the table: your down payment plus closing costs and prepaid items, less any credits. How closing costs break into their categories is covered in the learn library. On a Maine purchase, your half of the transfer tax would normally appear in the government charges section, and with the exemption it leaves. I would plan around it in six steps.

1. You will want the program settled before you shop. Please ask the lender you are working with, early, whether you fit a MaineHousing first-time buyer program and whether they participate in it. The answer decides whether the transfer tax is in your budget at all, and it is a much easier conversation before you have an accepted offer.
2. Your pre-approval should reflect the loan you will actually use. A documented pre-approval runs on reviewed income, credit and assets. If the plan is a MaineHousing loan, the pre-approval should be built on that program's terms, so that the cash-to-close figure you carry into your offer is the right one.
3. Please read the government fees line on your Loan Estimate. The Loan Estimate, the three-page estimate a lender sends after you apply, lists transfer taxes in its section for taxes and other government fees. If your half of the Maine transfer tax is still showing there, that is worth a question, because some estimates are built before the exemption is confirmed. The number should come out once the lender knows the program, and you want your cash-to-close figure to match what the closing agent will collect.
4. You can plan for the savings once the program is confirmed. Several hundred dollars staying in your account helps with the moving truck or the first utility deposits. Until your lender confirms the program in writing, I would plan your cash to close as if you were paying your half.
5. The seller saves the same amount, which can help when you negotiate. Because the exemption covers the deed, the seller's half of the transfer tax disappears too. If you are asking for help with closing costs, what a seller is allowed to pay depends on your loan program, and how a seller credit lowers your cash to close or buys down your rate is the follow-on decision.
6. You will see it confirmed on the settlement statement. When the final numbers arrive before closing, the transfer tax line for the buyer should read zero. If it does not, one call to the closing agent sorts it out before signing day.

Where this goes wrong

Assuming first-time status alone is enough. The exemption follows the MaineHousing program, so a first-time buyer closing with a conventional or FHA loan outside those programs still pays the ordinary half. What removes the tax is closing with one of the MaineHousing programs.

Choosing the loan for the exemption alone. On a typical Maine purchase price, your half of the transfer tax is a few hundred dollars. That is worth having, and it is also smaller than the difference a rate, mortgage insurance or down payment assistance can make over the life of a loan. The right way to compare is the whole loan, with the exemption as one line in the cash-to-close column.

Counting the savings before the program is settled. MaineHousing programs have an education class and eligibility steps that have to be finished before closing. If the loan ends up outside the program, the tax comes back. I would keep the exemption out of your cash-to-close math until your lender confirms the program in writing.

Expecting it on a refinance. The transfer tax has never applied to an ordinary Maine refinance, because a refinance records a mortgage without transferring ownership. The Maine refinance page covers what a Maine refinance does and does not trigger.

An illustration, so the arithmetic is clear

Numbers below are made up to show the mechanism. They are not a quote and not anyone's real file.

Say you are buying a home in Augusta for $285,000 with a MaineHousing First Home Loan. The price works out to 570 units of $500. Without the exemption, the transfer tax on the deed under § 4641-A would look like this:

Price                               $285,000
Units of $500                            570
Rate per unit                          $2.20
                                     -------
Transfer tax on the deed              $1,254
Seller's half                           $627
Your half                               $627

With the exemption claimed on the declaration at closing:

Transfer tax on the deed                  $0
Seller's half                             $0
Your half                                 $0
Change to your cash to close           -$627

Six hundred twenty-seven dollars stays in your account, and the seller keeps the same amount. The rest of your closing costs, your prepaid taxes and insurance, and your down payment are unchanged.

What to do now

If you are shopping for your first home in Maine, the useful first step is to see the numbers for your own scenario. Run your numbers and you will see rates for your scenario, your debt ratio, and closing costs priced for Maine rather than a national average. No credit pull, no account, nobody calls you.

When you want a letter behind you, get pre-approved for a Maine mortgage and we can look at a MaineHousing first-time buyer loan beside the other options, with the transfer tax exemption in the arithmetic where it belongs. No pre-approval from anybody is a loan commitment. Final approval always depends on the property, the appraisal and underwriting the complete file.

Common questions

Does every first-time home buyer in Maine get the transfer tax exemption?

No. The exemption in 36 M.R.S. § 4641-C applies to a deed to a purchaser who receives financial assistance through the Maine State Housing Authority's first-time home buyer mortgage loan programs. A first-time buyer who closes with a conventional, FHA or VA loan outside those programs pays the ordinary buyer's half of the tax under § 4641-A. MaineHousing's own first-time buyer definition is the test, and it counts anyone who has not held an ownership interest in a principal home within the past three years.

Does the seller also skip the Maine transfer tax when I use a MaineHousing loan?

Yes. Maine Revenue Services' summary of the 2025 law changes states that a deed to a purchaser receiving assistance through MaineHousing's first-time home buyer mortgage loan programs is exempt for both the buyer and the seller. That applies to transfers on or after November 1, 2025. The exemption attaches to the deed rather than to one party, so the seller's half under § 4641-A goes to zero along with the buyer's.

How much is the Maine real estate transfer tax for a buyer?

Under 36 M.R.S. § 4641-A, the tax is figured on the price, and the statute places one half on the seller and one half on the buyer. The worked example in this article shows the arithmetic on a real price. A buyer financed through a MaineHousing first-time home buyer program pays none of it on a deed dated on or after November 1, 2025.

Who claims the first-time home buyer transfer tax exemption at a Maine closing?

The closing agent, on the Real Estate Transfer Tax Declaration that is filed with the deed at the county Registry of Deeds. Maine Revenue Services updated the declaration for this exemption, and the closing agent selects the first-time home buyer exemption and enters the matching code listed on page four of the form. The buyer does not file anything separately, and the practical step is making sure the closing agent knows the loan is a MaineHousing first-time buyer loan before the declaration is prepared.

Will the exemption show up on my Loan Estimate?

It should, once your lender knows you are using a MaineHousing first-time buyer program. Transfer taxes appear on the Loan Estimate in its section for taxes and other government fees. If your half of the Maine transfer tax is still listed there after the program is confirmed, ask the lender to update the estimate. The cash-to-close figure you are planning around should match what the closing agent will collect.

Does the Maine transfer tax exemption apply when I refinance later?

The question does not come up. Maine's transfer tax attaches to a deed that transfers real property, and an ordinary refinance records a new mortgage without transferring ownership, so a refinance has never triggered the tax. No general Maine mortgage recording tax was identified either. Recording fees still apply to the new mortgage.