If you plan to sell your home in Delaware, you need to understand how transfer taxes work, particularly in New Castle County. Transfer taxes are fees imposed by state, county, or municipal authorities when a property changes hands. This short guide will explore how transfer taxes function in New Castle County and what you, as a seller, can expect to pay when you transfer your property. We will also cover possible exemptions for which you could qualify. Real estate transfer taxes are charged by state or local governments when property ownership is transferred from one individual to another. According to the Federal Trade Commission, these taxes are due when the title of a property, essentially the document confirming legal ownership, is officially transferred to a new owner. This can occur through sales, inheritance, or gifting of property. The amount owed in transfer taxes can vary significantly based on the property’s location, as different states, counties, and cities have usually established their own rates and regulations. Transfer taxes primarily serve as a revenue source for local and state governments, funding various public services and infrastructure projects. In Delaware and New Castle County, traditionally, both the buyer and seller pay for transfer taxes, splitting the total amount. First-time home buyers can receive a 0.5% reduction in their rate, lowering it from 1.25% to 0.75%, claimable at closing. This reduction is capped at $2,000 and applies only to the first $400,000 of property value. This is paid by the buyer.What are transfer taxes?
Who pays for transfer taxes?
