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Delaware Headlines

Delaware legislators introduce bipartisan bill to cut realty transfer tax

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Roman Battaglia
/
Delaware Public Media

A bipartisan group of lawmakers are pursuing legislation to reduce the cost of buying and selling a home in Delaware.

House Bill 358 would cut the realty transfer tax in Delaware by 25%.

"It will return the 1% increase that we inflicted on everyone back in I believe 2017 when we took the transfer tax in Delaware and we raised it from 3% to 4% which was a 25% tax increase," said Rep. Mike Ramone.

It was raised to 4% in 2017 to bridge a major budget shortfall the state was facing at that time.

Revenue from the realty transfer tax is split between state and local governments with the state netting 62.5% of the proceeds and local governments 37.5%. Under HB 358 the state’s share would be impacted.

Ramone says Delawareans would save a lot of money as a whole under the proposal.

"It will give about 75 to 85 million dollars back to the people who pay transfer tax, and of course in the last 3 years anyone who sold their house or bought a house had to pay that extra percent,” said Ramone. “Now you know the average house is what $300,000 right now, and I think we're talking maybe 3,000 additional dollars so it would cost $12,000 to be able to sell your home to someone else that was a $300,000 house."

Ramone argues the realty transfer tax impacts millennials and seniors in particular, and this bill would facilitate home ownership among young people while giving senior citizens a less costly opportunity to transition into their golden years.

Ramone adds the 4% realty transfer tax was supposed to expire three years ago.

Based on the latest estimates from the Delaware Economic and Financial Advisory Council, Delaware homebuyers and sellers would retain more than $100 million annually.

Democratic State Rep. William Bush is the prime sponsor of the legislation, which has bipartisan support with 13 Democrats and 15 Republicans are either sponsoring or cosponsoring the bill.

The bill is waiting for a House Administration Committee hearing. If passed, it would take effect on July 1.