Real Estate Transfer Tax: State’s Way of Transferring its Financial Burden
A 1% increase in Delaware’s real estate transfer tax in 2017 brought the rate to 4%, worrying realtors in the state. The increase placed a burden on both buyers and sellers, who equally split the tax at closing.
Sellers lost dually with this legislation, facing a harder sell and receiving less profit at closing by having to cover the other half of the transfer tax. Buyers lost too, now having to save thousands more to cover the tax alone. As if a down payment on a home wasn’t a big expense already.
So, who won with the 1% increase?
It should come as no surprise to most that Delaware State Government is the sole winner in the deal, with the extra revenue going directly into the General Fund. The measure was enacted to combat the 2017 budget shortfall, to the detriment of realtors and homebuyers.
Bruce Plummer, president of the Delaware Association of Realtors, said “We know for a fact that home ownership builds strong communities,” with “better school systems, better health, higher volunteerism rates and lower crime rates.”
The legislature disregarded Delawareans when making a decision that impacted their ability to move from renting to owning a home—a big step for many. Realtors, businesses, and communities all lost with legislation that halted more homeownership. Those looking to move to the state were given a reason to reconsider.
When it came to the concern over the increase, Plummer asserted, “We’re not just trying to protect the industry, we’re trying to protect the home owner and Delaware’s private property rights.”
So are we. The real issue boils down to when our legislators will fight for these protections as well.
Unfortunately, this is yet another example of the General Assembly putting itself above residents and businesses. Delaware cannot continue to push key industries aside in favor of funding its bloated spending.