Buying in Delaware
Delaware realty transfer tax and the first-time buyer reduction
The realty transfer tax is usually the largest closing cost in a Delaware home purchase. Here is how it is calculated, who pays it, and how first-time buyers can lower their share.
What the tax is
Delaware charges a realty transfer tax when a deed transfers real estate. It has two parts:
- a state portion, and
- a local portion for the county or town.
In most of the state the local portion is 1.5% and the state portion is 2.5%, for 4% in total. Where a county or town has not adopted the full 1.5% local tax, the state portion is 3% instead. Your settlement attorney will confirm the rate for your address.
What it is based on
The Division of Revenue form for the first-time buyer reduction uses the greater of the price paid and the highest assessed value of the property for local tax purposes. For most sales, that is the price.
Who pays it
Delaware law apportions the tax equally between the seller and the buyer. Your Agreement of Sale states how it is handled in your sale, so read that section with your agent before you sign.
The first-time home buyer reduction
Delaware reduces the buyer’s share of the state tax for a first-time home buyer. Under state law (30 Del. C. §5401), that means one of these:
- a person who has never held a direct legal interest in residential real estate, anywhere, and who intends to live in the home as a principal residence within 90 days,
- spouses buying together, when neither has ever held such an interest and both intend to live in the home within 90 days,
- individuals buying together, when none of them has ever held such an interest and all intend to live in the home within 90 days.
The reduction is 0.5% multiplied by the lesser of the property’s value or $400,000, so it can be up to $2,000. It applies only to the buyer’s portion. The seller’s portion does not change.
To claim it, the buyer signs the Division of Revenue’s First Time Home Buyer’s Credit schedule (Form RTT-SCH), certifying under penalty of perjury that they meet the definition. Tell your settlement attorney early that you may qualify, so the paperwork is ready at settlement.
Two examples
These use simple numbers and an even split. Your contract and your attorney’s figures control.
| $300,000 home | $500,000 home | |
|---|---|---|
| Total tax at 4% | $12,000 | $20,000 |
| Buyer’s half | $6,000 | $10,000 |
| First-time buyer reduction | $1,500 | $2,000 (the cap) |
| Buyer pays | $4,500 | $8,000 |
Other things to know
- The law also exempts some kinds of transfers. Your settlement attorney can tell you whether one applies.
- The transfer tax is one of several closing costs. See what buyers pay at closing in Delaware.
- First-time buyers may also qualify for state home loan help. See our first-time buyer guide.
Talk to your settlement attorney, lender or tax advisor about how the tax applies to your purchase.
Frequently asked questions
Is the Delaware transfer tax 4%?
In most of the state, yes: 2.5% to the state and 1.5% to the county or town. Where the full local tax hasn’t been adopted, the state portion is 3%. Your settlement attorney confirms the rate.
Who pays the realty transfer tax in Delaware?
State law apportions it equally between seller and buyer. Your Agreement of Sale states how it is handled in your sale.
How much do first-time buyers save?
The buyer’s share of the state tax drops by 0.5% of the value, on up to $400,000. That is a reduction of up to $2,000.
I owned a home in another state. Am I a first-time buyer in Delaware?
Probably not for this reduction. The Delaware definition looks at any direct legal interest in residential real estate, wherever it is located. Ask your settlement attorney.
Ready to start looking?
Tell us what you want in a home and where. We send matching homes as they hit the market and help you plan the costs. No pressure and no obligation.
Related guides
- What buyers pay at closing in Delaware
- Why Delaware settlements use an attorney, and what happens at settlement
- Smyrna, DE area guide
- Newark, DE area guide
- Milford, DE area guide
- First-time home buyer guide for Delaware
- Buying a home in Delaware with a VA loan
- Already own a home? Get a free home value
- Selling first? How we sell a home, step by step
The Key Group of Real Broker LLC · Jordan Brown with Real · Brokerage 855-450-0442 · Equal Housing Opportunity.
This page is general information, not legal, tax or loan advice. Talk to your settlement attorney, lender or tax advisor about your own purchase.
Last updated November 2026. General information only; your settlement attorney or title company will confirm taxes and costs for your purchase.