Del. Realty Transfer Tax Could Be Reduced Under New Legislation

Delaware’s realty transfer tax would be reduced by 25-percent under a bill with bipartisan sponsorship in the General Assembly. (HB 358)
The transfer tax, which is typically split between the buyer and seller of a home, was increased five years ago during difficult economic times that faced the state.
The measure has 15 Republican sponsors and 13 Democrats so far. If it’s enacted, the realty transfer tax could be reduced to three-percent effective July 1st.

“The realty transfer tax is levied on the purchase price of the home,” State Representative Kevin Hensley, R-Townsend, Odessa, Port Penn said. Hensley also works in the real estate industry.  “Right now, in most cases, Delaware has a functional realty transfer tax of 4%.  Typically, this cost is spilt between buyer and seller.  However, in the current competitive housing market, prospective buyers are often paying the entire tax to convince sellers to accept their offers.”

The realty transfer tax was effectively increased from 3% to 4% in 2017 during a difficult budget year.

“This realty transfer tax hike was supposed to expire two years after it was imposed, and that was three years ago,” State Representative Mike Ramone, R-Pike Creek South said.

“Our high realty transfer tax is impacting two groups that can least afford it – millennials and seniors,” Ramone added.  “If we can do something to both facilitate home ownership among young people while giving our older citizens a less costly opportunity to gracefully transition into their golden years, I think we have an obligation to do it.”