Closing costs in Delaware

The rules

What Delaware does differently

State transfer tax

2.5% of value where the county or municipality levies its own 1.5% (state realty transfer tax, 30 Del. C. § 5402); 3% where no local tax applies (about 2.5% of the price at $400,000).

Who pays it

Split between buyer and seller.

County and city add-ons

All three counties and most municipalities levy the 1.5% local tax, so the combined rate is 4%, normally split 2% buyer and 2% seller. First-time buyers get a 0.5% reduction on their share, capped at the first $400,000.

Attorney at closing

Delaware requires an attorney to conduct or supervise the closing, so an attorney fee is a normal line on both sides.

Owner’s title policy

The seller customarily pays for the owner’s title insurance policy in Delaware; the buyer pays for the lender’s policy.

Notes

On a $400,000 sale: $10,000 state plus $6,000 local, $8,000 for each side. A Delaware-licensed attorney must conduct the settlement (In re Mid-Atlantic Settlement Services, Del. 2000).

• delcode.delaware.gov — “Said tax is to be apportioned equally between grantor and grantee.”
• revenue.delaware.gov — “the state realty transfer tax rate was increased from 1.5% to 2.5% for property located in counties and municipalities that impose a realty transfer tax”

Worked example

A $400,000 home in Delaware, 20% down

Loan of $320,000 at 6.5%, closing on the 15th. Lender, title and recording figures are typical line items used for illustration, the same on every state page; the transfer tax and the owner’s policy side follow Delaware’s rules above. Not a quote: the calculator takes your own figures.

Questions

What people ask about Delaware

Who pays the transfer tax in Delaware?

Delaware charges a state transfer tax of 2.5% of value where the county or municipality levies its own 1.5% (state realty transfer tax, 30 Del. C. § 5402); 3% where no local tax applies, about 2.5% of the price, and it is customarily split between buyer and seller. All three counties and most municipalities levy the 1.5% local tax, so the combined rate is 4%, normally split 2% buyer and 2% seller. First-time buyers get a 0.5% reduction on their share, capped at the first $400,000.

Do you need an attorney to close on a house in Delaware?

Delaware requires an attorney to conduct or supervise the closing, so an attorney fee is a normal line on both sides.

Who pays for the owner’s title policy in Delaware?

The seller customarily pays for the owner’s title insurance policy in Delaware; the buyer pays for the lender’s policy.

How much are seller closing costs in Delaware?

On a $400,000 sale with a 5% commission, the worked example on this page comes to $30,000 for the seller, including $5,000 of transfer tax, before the mortgage payoff and any concessions or repairs. The seller net sheet calculator shows the walk-away figure.