Short answer
In Delaware the realty transfer tax is split equally between seller and buyer. The Division of Revenue's return instructions state a total rate of 4 percent, made up of 2.5 percent to the state and 1.5 percent to the county or municipality. On a hypothetical $250,000 sale, that is $10,000, or $5,000 each.
Split equally
The Delaware Division of Revenue's instructions for Form RTT-TAX say the tax is apportioned equally between the grantor or seller and the grantee or buyer. The sale contract can change who pays what, so read that clause. Delaware's tax is payable when the document is presented for recording.
The rate
The instructions state the realty transfer tax rate at 4 percent of the value of the property. They show 2.5 percent going to the State of Delaware and 1.5 percent to the county or municipality. The base is the greater of the consideration and the highest assessed value for local tax purposes. The instructions also carry a special reduction for contracts signed before August 1, 2017, which will not matter for most current sales. Delaware's system is different from Pennsylvania's, because the tax is a single combined rate split between the state and the county or municipality. For the seller, the practical question is simpler: what is my half? Take the price, multiply by 4 percent, then divide by two if the contract splits it equally. Check that your offer's terms say so. If the buyer is asking you to pay more than your half, you can negotiate.
An example
On a $250,000 sale, 4 percent is $10,000, and an equal split means $5,000 each. That is an illustration. The Division's form is the final word, and local rules could vary. Ask your closing agent or attorney to run the numbers.
Questions for the closing agent
Ask for a written estimate of the Delaware transfer tax on your price. Ask how the contract splits it, and who writes the check at closing. Ask whether your municipality or county takes a different share from what the state instructions describe. Ask whether any exemption applies, and what Section 5401 language the closing agent will cite. If an estate is the seller, ask how the form will show the grantor as a fiduciary. The state's form allows a seller to be an estate or trust. Put the answers in writing and compare the net from each offer.
Exemptions and next steps
Part D of the form asks you to explain the basis for any exempt conveyance by citing Title 30, Section 5401 of the Delaware Code. If you think a transfer qualifies, such as a transfer out of an estate, have an attorney confirm. Kaizen Home Buyers buys Delaware houses as-is for cash, with no repairs and no agent commission. We make an offer within 24 hours and can close in 14 to 30 days or on your date. Call 267-329-0084.