A bipartisan group of lawmakers is pursuing legislation to lower the cost of buying and selling a home in Delaware.
House Bill 358 would reduce real estate transfer taxes in Delaware by 25%.
“It will return the 1% increase that we gave everyone in I believe 2017 when we took the transfer tax in Delaware and increased it from 3% to 4%, which represented a 25% increase,” Rep. Mike Ramone said. .
It was increased to 4% in 2017 to address a major budget deficit the state was facing at that time.
Real estate transfer tax revenue is split between state and local governments, with the state receiving 62.5% of the proceeds and local governments 37.5%. Under HB 358, the state’s share would be impacted.
Ramone says Delawares would save a lot of money overall under the proposal.
“It will bring in about $75-85 million for the people paying the transfer tax, and of course in the last 3 years anyone who sold their house or bought a house had to pay that extra percentage,” Ramone said. . “Now you I know the average house is $300,000 right now, and I think we’re talking maybe an extra $3,000, so it would cost $12,000 to be able to sell your house to someone else that was a $300,000 house.
Ramone argues that property transfer taxes are impacting millennials and seniors in particular, and that this bill would make home ownership easier for young people while providing seniors with a less costly opportunity to pass to the golden age.
Ramone adds that the 4% real estate transfer tax was due to expire three years ago.
Based on the latest estimates from the Delaware Economic and Financial Advisory Council, buyers and sellers of Delaware homes would keep more than $100 million annually.
Democratic State Rep. William Bush is the lead sponsor of the legislation, which enjoys bipartisan support with 13 Democrats and 15 Republicans sponsoring or co-sponsoring the bill.
The bill awaits a House Administration Committee hearing. If passed, it will come into force on July 1.