Short answer
It reduces the buyer's share of the tax, not yours. Section 5402(c) cuts the grantee's tax by one half of one percent of the lesser of the property value or $400,000, if the buyer plans to live in the house as a principal residence within 90 days. You may still owe your own share.
What the break does
Delaware's realty transfer tax is apportioned equally between grantor and grantee under section 5402. The first-time homebuyer provision in section 5402(c) reduces the grantee's tax by one half of one percent multiplied by the lesser of the value of the property or $400,000. It applies to transactions on or after August 1, 2017, and the buyer must intend to occupy the home as a principal residence within 90 days.
What it does not do
The break is for the buyer, so it does not wipe out the seller's half. A seller who agrees in the contract to pay the whole tax is a different story, and the contract controls. Section 5412 puts the burden of paying on the grantor unless the parties agree otherwise. Read the transfer tax language in the agreement of sale, because a buyer who qualifies still brings a lower number to the table.
How it can show up in your negotiation
A buyer who qualifies may ask you to share closing costs differently, or may ask for a credit. Do not guess. Ask your settlement agent to run the numbers on the settlement statement and show your share and the buyer's share separately. If the buyer is an investor or will not live in the house, the break would not apply.
Check with a professional
Rules and dollar caps can change. The page we reviewed is the Delaware Code as published online. Confirm the current text with a Delaware real estate attorney or your title company. This page is general information and not legal advice.
Selling for cash instead
A cash buyer who is not seeking an owner-occupant break keeps the closing math simple. You can also ask Kaizen Home Buyers for a cash offer. We buy as-is, with no repairs and no agent commission, make offers within 24 hours and close in 14 to 30 days or on the date you set. Reach us at 267-329-0084.