What taxes are involved in the purchase of a home?

The purchase of a residential property in Delaware carries certain taxes that must be paid in order to finalize the transaction. The first is the Transfer Tax, which is based on the sale price or fair market value of the property, whichever is higher. The tax rate is 4.25% for properties that cost $500,000 or less, and 3.75% for properties that cost more. In addition, the buyer is responsible for the Recordation Tax. This tax is based on the recorded deed and is 0.25% of the first $250,000 of the sale price or fair market value, whichever is higher. This tax rate lowers to 0.125% on the remaining amount above $250,000. Finally, the buyer may be responsible for additional taxes, including the School Property Tax, Municipal Property Tax, and County Property Tax. The School Property Tax rate is 1.25% of the assessed value of the property. The Municipal Property Tax rate is determined by the municipality where the home is located, and the County Property Tax rate is determined by the county where the home is located. Overall, the taxes involved in the purchase of a home in Delaware may vary depending on the sale price or fair market value of the property, as well as the municipality and county in which the home is located. It is important for buyers to be aware of the taxes they may be responsible for in order to ensure the financial stability of the purchase.

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