Get Delaware Form 5401

There are no state or local sales taxes in Delaware and as such, sales tax exemption certificates and reseller certificates are not applicable to Delaware. Delaware imposes license and gross receipt taxes on the sale of most goods and services.

Delaware has one of the most expensive transfer tax rates in the country. The state levies a 4% tax rate on any property sold, which is evenly split between the buyer and the seller. This means the sale of a $500,000 house will come with a $20,000 tax bill, of which $10,000 will need to be paid by the seller.

If the property is located in an area that does not impose a local transfer tax, the state realty transfer tax rate is now 3%. Realty transfer taxes are typically shared equally by the buyer and the seller.

The State of Delaware assesses the tax at the rate of 2% on the amount of the construction contract after deducting a $10,000 exclusion.

The transfer tax is commonly split evenly between the buyer and the seller so buyer pays 2% and the seller pays 2%. First time home buyers have been exempt from the county portion of 0.75% as long as the property is not located inside a municipality such as the town of Middletown.

There are no state level property taxes in Delaware; only real property is subject to taxation. With certain exceptions, tax rates are the same for all types of property including residential, industrial and commercial.

First-time buyers in Delaware typically qualify for state-level exemptions. For example, Delaware first-time buyers automatically qualify for a state transfer tax exemption on a purchase price up to $400,000. First-time buyers purchasing property worth more than $400,000 will pay 1.25% of the amount above $400,000.

If the property is located in an area that does not impose a local transfer tax, the state realty transfer tax rate is now 3%. Realty transfer taxes are typically shared equally by the buyer and the seller.