Delaware Transfer Tax Explained

Transfer tax is one of the closing costs Delaware buyers and sellers should understand before settlement.

In most Delaware real estate transactions, the realty transfer tax is 4% of the sale price. It is typically split between the buyer and seller, with the buyer paying 2% and the seller paying 2%.

The transfer tax can be negotiated differently if both parties agree. For example, a buyer may offer to pay more than their normal share to increase the seller’s net proceeds, especially in a multiple-offer situation.

How Transfer Tax Affects Sellers

For sellers, transfer tax is one of the costs that can reduce the amount received at settlement. This is why it is important to review estimated net proceeds before listing or accepting an offer.

How Transfer Tax Affects Buyers

For buyers, transfer tax is usually part of the cash needed to close. Buyers should review estimated closing costs early with their lender and settlement company.

New Castle County Buyer Discount

In some New Castle County transactions, buyers may receive a transfer tax reduction when purchasing a property located outside of a municipality. The settlement attorney should confirm whether the property qualifies.

Team Freebery's Guidance

Team Freebery does not provide tax or legal advice, but we help our clients understand how transfer tax may affect their transaction and what questions to ask the proper settlement professionals.