Prior to this past Sunday, Delaware was the state that charged the highest property transfer tax in the country. Customarily 3%, split between buyer and seller, with half the money going to the state and half to the local county in which a property was sold. After Sunday, Delaware is the state with the highest property transfer tax in the country, by a much larger margin.
Thanks to a failure to pass a state budget by the deadline of June 30, a midnight deal on the Sunday of a holiday weekend was struck, increasing the state property transfer tax on real estate transactions up a full 1%. Also included in the measure were increased SIN taxes (those on alcohol and tobacco products).
So a few cents more for your smokes, a few cents more for your booze, and thousands of dollars more in fees if you plan to buy or sell a home in the 1st state.
On a $300,000 home sale, the result is an extra $1,500 out of pocket for buyers and an extra $1,500 out of pocket for sellers. It doesn’t take a partisan point of view to consider this a terrible move by the state and it’s “leadership”. At a time when home ownership rates in the United States are their lowest since the 60’s, and would-be buyers struggle to enter the market largely due to the associated costs, this move by Delaware is a pathetic way to address budget issues.
More and more states and federal governments are looking to the housing market to compensate for decades worth of fiscally irresponsible practices, so it’s important for people to take this into consideration come election time. Home ownership has historically been one of the biggest and best steps for individuals to achieve financial wealth, but through actions like this one taken by Delaware and not long ago the federal money grab through conventional mortgage “g fees” one of the best financial moves an individual can make is under attack from politicians on both sides of the aisle.
Buying and owning a home is a huge piece of the American Dream, and at Mason Mac we’re helping people achieve that dream every day – while we always educate our clients and partners on the mortgage world, it’s important to know when things like this happen, too. We have clients, business partners, and tons of friends in Delaware, and we hate to see their homes and home ownership dreams treated like a piggybank by the people in charge. We hope our Delaware friends don’t see any further increased costs going forward, and that you’ll all remember this 4th of July surprise when election time rolls around.