What is the Delaware realty transfer tax?
It is a tax charged when a deed transfers real estate in Delaware, and the deed will not be recorded until it is paid. The total is generally 4% of the sale price: 2.5% goes to the state and 1.5% goes to the local government, where the local government levies its full share.
Delaware's rate is one of the higher transfer taxes in the region, so it is one of the biggest closing costs a seller sees. Estimate yours with our Delaware transfer tax calculator.
The tax is based on the price in the deed transfer, and it is due every time the deed changes hands in a sale, whether the buyer pays cash or uses a loan. It is separate from your property taxes, capital gains taxes, and recording fees. Because it is figured on the full price, not your profit, you owe it even if you sell for less than you paid.
Who pays Delaware's realty transfer tax?
By custom, the buyer and seller each pay half, unless the sales contract says otherwise. The split is negotiable. Some buyers ask the seller to pay all of it; some cash buyers agree to pay more of it. When Silverside buys your house, we pay all closing costs, including your share of the transfer tax.
| Piece | Rate | Typical seller share | Typical buyer share |
|---|---|---|---|
| State | 2.5% | 1.25% | 1.25% |
| Local (where full share levied) | 1.5% | 0.75% | 0.75% |
| Total | 4% | 2% | 2% |
Read the transfer tax line in any offer. It changes your net as much as a price change would.
Why the split matters: on a $300,000 sale, the difference between paying half and paying all of the tax is $6,000. When comparing two offers, subtract each offer's transfer tax share, payoffs, and other costs to see your true net. An offer that is a few thousand dollars lower but has the buyer paying all the transfer tax can leave you with more money.
The split is written into the agreement of sale, so negotiate it before you sign, not at the settlement table.
How much transfer tax does a seller pay?
At a 4% total rate and a 50/50 split, the seller's share is 2% of the price.
| Sale price | Total tax (4%) | Seller share (2%) | Buyer share (2%) |
|---|---|---|---|
| $200,000 | $8,000 | $4,000 | $4,000 |
| $300,000 | $12,000 | $6,000 | $6,000 |
| $400,000 | $16,000 | $8,000 | $8,000 |
These examples assume the full 4% applies and no first-time buyer reduction. Add payoffs, commissions (if listing), and other costs in our net proceeds calculator.
How does the first-time homebuyer reduction work?
A qualifying first-time buyer gets the state portion reduced by 0.5% on the buyer's share, capped at $2,000. This helps the buyer, not the seller. The seller's half is not reduced.
Example: on a $300,000 home, 0.5% is $1,500, which is under the $2,000 cap, so the buyer saves $1,500. On a $500,000 home, 0.5% would be $2,500, so the savings stop at $2,000.
Sellers sometimes hear that a first-time buyer "doesn't pay transfer tax." That is not quite right. The buyer's share is reduced, not erased, and the seller's half is figured the usual way unless the contract shifts it. If a buyer asks you to cover their share, treat that like a price reduction and run the numbers before agreeing.
Do Wilmington and Newark charge extra transfer tax?
Both Smyrna and Milford levy the 1.5% local tax, so sales there total 4%.
- Smyrna: 1.5% local, 4% total.
- Milford: 1.5% local, 4% total. Milford waives its city transfer tax if all buyers are first-time homebuyers.
Other towns and unincorporated areas may differ. Confirm the local rate with your settlement attorney.
If you are selling in a town with its own rules, ask the settlement agent early whether any local waiver applies. For example, in Milford, if every buyer is a first-time homebuyer, the city's 1.5% is waived, which lowers the total due on that sale. How any savings are shared depends on the contract, so read the transfer tax clause closely.
How does Delaware's transfer tax compare with Maryland and Pennsylvania?
Nearby areas charge less in transfer tax but add other costs.
| Area | Transfer/recording taxes |
|---|---|
| Delaware | Generally 4% total (2.5% state + 1.5% local) |
| Cecil County, MD (Elkton) | State 0.5% (0.25% for a first-time MD owner-occupant buyer, paid by seller); county transfer tax 0.5%; recordation $4.10 per $500 |
| Chester, PA | 2.5% total (1% state + 0.75% city + 0.75% Chester Upland School District) |
The big takeaway for border-area owners: Delaware's transfer tax is generally higher than in Chester or Cecil County, but Maryland adds a recordation tax, and each state has its own nonresident withholding rules. If you own property on both sides of a state line, get a separate estimate for each sale.
How do you estimate your transfer tax?
You can estimate your share in four steps.
- Confirm the total rate for your town or county with your title company (generally 4%).
- Multiply the sale price by the total rate to get the full tax.
- Check your contract for who pays; the default custom is 50/50.
- Multiply the full tax by your share. That amount comes off your proceeds at settlement.
Example: a $250,000 sale at 4% equals $10,000 total. At 50/50, the seller pays $5,000. If the contract says the buyer pays all of it, the seller pays $0 in transfer tax.
Common mistakes to avoid:
- Forgetting transfer tax when comparing a cash offer to a listing price.
- Assuming the first-time buyer reduction lowers the seller's half. It does not.
- Assuming every town uses the same local rate. Always confirm.
Our transfer tax calculator does this math for you, and our cash vs. list calculator puts it side by side with other costs.
How is transfer tax paid at closing?
The settlement agent collects the tax from each side at closing and pays it when the deed is recorded. You do not write a separate check. Your share comes out of your proceeds on the settlement statement.
When Silverside buys your house with a cash offer, we pay all closing costs, including your share of the transfer tax, and every line is in the written offer, so you can compare net numbers, not just prices. Call (302) 525-0787 with questions.
General information, not legal or tax advice.
If you are selling for an estate, in a divorce, or through a court process, the same tax generally applies, but the settlement agent will confirm whether any exemption fits your transfer. Transfers that are not sales, such as some gifts between family members, can be treated differently; ask a settlement attorney before assuming an exemption.
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Get My Written Offer Call (302) 525-0787Frequently asked questions
What is the transfer tax rate in Delaware?
Generally 4% total: 2.5% state and 1.5% local where the local government levies the full share.
Does the buyer or seller pay transfer tax in Delaware?
By custom, they split it 50/50, but the contract can change that. The seller's share is usually 2% of the price.
How much is the transfer tax on a $300,000 house in Delaware?
At 4%, the total is $12,000. With a 50/50 split, the seller pays $6,000 and the buyer pays $6,000.
Is there a first-time buyer exemption?
There is a reduction, not a full exemption: the state portion drops by 0.5% on the buyer's share, capped at $2,000. Milford also waives its city tax if all buyers are first-time homebuyers.
Can the deed be recorded without paying the tax?
No. Delaware will not record a deed until the realty transfer tax is paid.
Is transfer tax lower in Chester, PA?
Chester's total is 2.5% (1% state, 0.75% city, 0.75% school district), compared with Delaware's general 4%.
Sources
General information, not legal, tax, or financial advice. Laws, fees, and schedules change. Confirm with the office named or your attorney.
