A group of legislators are trying to roll back last year’s surprise increase in the real estate transfer tax.
If enacted, the bill, sponsored by State Rep. Michael Ramone, R-Newark, would decrease by one percent the rate of realty transfer tax to be received by the state to two percent.
The tax emerged from an effort to plug a more than $400 million budget gap in a last-minute deal. The increase caught the influential residential real estate industry flat-footed and gave the First State the dubious distinction of having one of the nation’s highest transfer taxes.
Delaware does have the lowest property tax rates in the region, an attraction for retirees from neighboring New Jersey and Pennsylvania.
There have been concerns that the high transfer tax is slowing down sales in Delaware, a state that has not seen the home price gains of some of its neighbors.
Chances of the reduction gaining traction may be limited in a House and Senate controlled by Democrats. The bill’s sponsors are Republicans.
There has been speculation that reductions in the transaction tax could be targeted at first-time homebuyers and perhaps others and the bill could be a vehicle to make such changes.
A fiscal note on the financial impact of the repeal on the state budget has not been completed.
[pdf-embedder url=”http://DelawareBusinessNow.com/wp-content/uploads/2018/05/HB297-1.pdf” title=”HB297″]
