Delaware Transfer Tax Increases
In an unexpected move, Delaware has made the cost of buying and selling a home increase for most people.
This makes the cost of buying or selling a home thousands more for the typical buyer and seller in Delaware.
This came as a surprise to most people since it was not even being considered prior to the vote last night.
The state legislature pushed through an increase of 1% on the transfer of titles. This transfer tax will be split evenly between buyers and sellers and goes into effect on August 1, 2017. If you are currently in the process of either selling your home, purchasing a new one, or both in Delaware you have until August 1st to go under contract before this increase takes place.
The Delaware General Assembly voted to raise the state portion of the Realty Transfer
When the bill moved to the Senate, Senator Robert Marshall (D-Wilmington), attempted to introduce an amendment that would have exempted 1st Time Homebuyers from the legislation, but his amendment was tabled.
You can read the entire bill HERE.
People also ask, What are Seller closing costs in Delaware?
What this Means for Home Buyers and Sellers
Unfortunately, this has a large impact on first-time homebuyers. It is typical for new home purchasers to be a little tight on their finances and this increase will make it even more difficult.
What may not be as apparent is the impact it will also have on people looking to move up. They will be facing a .5% increase on the sale of their home, and an additional .5% increase on the purchase of their new residence. Unless they are choosing to purchase in another State.
?In addition, short sales and foreclosures are increasing again creating pressure on the real estate market.
Below is a table showing the impact of the tax increase.
This table shows the increase for each side of the transaction.
Price | Current Transfer Tax(1.5% each side) | New Transfer Tax(2% each side) | $ Difference |
|---|---|---|---|
$100,000 | $1,500 | $2,000 | $500 |
$200,000 | $3,000 | $4,000 | $1,000 |
$300,000 | $4,500 | $6,000 | $1,500 |
$400,000 | $6,000 | $8,000 | $2,000 |
$500,000 | $7,500 | $10,000 | $2,500 |
$600,000 | $9,000 | $12,000 | $3,000 |
$700,000 | $10,500 | $14,000 | $3,500 |
$800,000 | $12,000 | $16,000 | $4,000 |
$900,000 | $13,500 | $18,000 | $4,500 |
$1,000,000 | $15,000 | $20,000 | $5,000 |
Deadline: August 1st, 2017
If you are currently in the process of purchasing a home, you may want to keep in mind this deadline. As you can see from the table, this could mean having to purchase a less expensive home or saving additional money for the transfer tax.
If you are selling your home, you also need to keep this deadline in mind as it will cost you additional money if you are not under contract by August 1st.
IMPORTANT: You must be under contract and remain under contract before August 1, 2017. If you go under contract on August 1st, you get the new transfer tax. Also please keep in mind that if your contract falls through after the 1st, your next contract will be after the transfer tax deadline.