Transfer Tax to Increase 1% effective August 1, 2017
Make sure you are under contract by July 31, 2017!
On July 3, 2017, after an unprecedented appropriation measure to extend the deadline, the Delaware General Assembly voted to raise the state portion of the Realty Transfer Tax a full 1% - effective August 1, 2017.
What does this mean?
Homebuyers from out-of-state may not be familiar with Delaware’s transfer tax, but it has historically been a 3% tax on all real estate sales, paid equally by buyers and sellers at settlement (1.5% each), and typically represents the largest closing cost. Proceeds from this tax are used equally by the county and state to fund public safety programs. Overall, property taxes in Delaware are comparatively low nationwide, and Delaware has no sales tax.
This 1% increase in closing costs, especially for higher-priced properties, can certainly add up.
According to information from the Delaware Association of REALTORS®, this bill takes effect on August 1, 2017, and does not apply to contracts entered into before August 1, 2017. So, if you are considering buying in the near future, make sure you are under contract by July 31, 2017! And save yourself some money at settlement.
We will have more information about the implication of this increase in the near future but wanted to spread the word to buyers and sellers as soon as possible.
For more information about the budget, click this link from The Cape Gazette: