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Delaware Transfer Tax Increases

July 3, 2017 By Sean Casey

Real estate agent going over tax numbers with couple buying or selling a home
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Delaware Transfer Tax Increases
What this Means for Home Buyers and Sellers
Deadline: August 1st, 2017

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 Tax a full 1% effective August 1, 2017! House Bill 279 was introduced today and sponsored by Speaker of the House Pete Schwartzkopf (D-Rehoboth Beach). The vote in the House of Representatives was 31 to 9. You can see the House vote HERE.

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. 

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About Sean Casey…

I'm a full time Realtor®. I enjoy reading, listening to music and watching Philadelphia sports. I love animals, especially dogs and my wife rocks!
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Sean Casey Patterson-Schwartz Real Estate

Patterson-Schwartz College
680 S College Ave
Newark, DE 19713
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