Greg and Lisa are purchasing a home in Sussex County, Delaware for $480,000. The purchase agreement states that the combined realty transfer tax will be split equally between buyer and seller, and that the maximum combined rate applies. What is the total realty transfer tax that Greg and Lisa will owe at settlement?
Correct Answer
C) $9,600
Delaware's maximum combined realty transfer tax rate is 4% (2.5% state rate + up to 1.5% local rate). On a $480,000 purchase, the total combined tax is $480,000 × 4% = $19,200. Split equally between buyer and seller, each party pays $19,200 ÷ 2 = $9,600. The question asks for the buyers' share, which is $9,600.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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