New Law Provides Relief to First-Time Home Buyers

Dover – First-time home buyers looking to settle in Delaware will receive financial relief under a new law sponsored by House Speaker Pete Schwartzkopf and Senate Pro Tempore David McBride and signed by Governor John Carney Tuesday.

This relief from a portion of the realty transfer tax will further encourage continued home ownership in Delaware.

“Home ownership is a rewarding but daunting process, and we should be doing what we can to make it easier for first-time home buyers looking to settle in the First State,” said Rep. Schwartzkopf, D-Rehoboth Beach. “If we can provide some relief and lift some of the financial burden around finding a home, we should. Home ownership is a source of great personal pride, and it provides an incredible opportunity to build equity.”

Revenue from Delaware’s realty transfer tax is provided to the county and the state, and the buyer and seller split the cost of both portions. In an effort to close a looming budget deficit, lawmakers increased the state’s portion of the transfer tax by 1 percent in 2017. That 1-percent increase was also split 50-50 between the buyer and seller.

Signed by Governor Carney, House Bill 380 exempts first-time homebuyers from paying the buyer’s share of the 1-percent increase up to a cap. Under the legislation, first-time homebuyers are exempt from paying 0.5 percent of a home’s value up to the first $400,000 of the selling price, or a maximum reduction of $2,000.

“I want to thank the General Assembly, the Counties, and the Delaware real estate community for their collaborative efforts to offer this relief to first-time home buyers,” said Governor Carney. “I encourage interested home buyers to visit the Division of Revenue’s website for more information.”

The new law is retroactive; so any eligible first-time homebuyer who purchased a home in Delaware on or after August 1, 2017 would be able to apply and receive a refund through the Delaware Division of Revenue.   

“Homeownership is a cornerstone of the middle class, a key to social mobility, and the bedrock of safe, stable communities,” said Sen. McBride, D-Hawk’s Nest. “We should be doing everything we can to bring it within reach for first-time buyers, including modifications to the realty transfer tax. This legislation passed the General Assembly with bipartisan majorities because it’s going to help Delaware families access the American Dream. I’m glad to have sponsored it in the Senate and I’m grateful to Gov. Carney for signing it into law.”

A first-time homebuyer is defined as a person who has never owned a home in any jurisdiction. Individuals who owned a home in another state, but are looking to buy in Delaware for the first time are not eligible.