When filing a quitclaim deed in Delaware, there are several taxes you need to take into account.
Filing Fees
Each county has its own fee structure:
- In Kent County, filing fees are $36 per document, $10 per page, and $5 per tax parcel number.
- New Castle County assesses a $13 per page and $3 parcel description fee. The county also assesses a $30 document fee and a $5 technology fee per document.
- Sussex County has a $30 document fee and a fee of $9 per page, as well as a maintenance fee of $1 per document. Contact the County Clerk’s Office if you have any questions about the fee structure before filing your deed.
Taxes
Property transfers can have tax implications for both the grantor and the grantee.
1. Real Estate Transfer Tax
Del. Code Title 30 Chapter 54 lays out transfer taxes for property exchanges: typically 4%. The state assesses a 3% tax rate unless the county’s tax rate is over 1%, in which case, it is 2.5%. The county has the right to assess between a 1% and 1.5% tax rate. Transfer tax payments are split between the grantor and the grantee at the time of sale.
There are 22 exemptions to the real estate transfer tax, including:
- Wills, mortgages, foreclosures, and leases on commercial property.
- Property values under $100.
- Transfers without consideration between parent corporations and subsidiaries.
- Spousal transfers.
- Transfers due to divorce.
- Transfers between parent and child, or parent and child’s spouse.
- Transfers to trustees.
- Government property sales and purchases.
2. U.S. Gift Tax (Form 709)
The federal government enforces a gift tax on large-value gifts from one party to another, including gifts between relatives.
Because of the value of many pieces of real estate, quitclaim deed transfers are often subject to a gift tax. Delaware does not assess a separate gift tax on real estate transactions.
3. Capital Gains Tax
The capital gains tax is assessed on the increased value of a property after its sale. The IRS looks back on the original purchase price and value of a piece of property compared to how much it sold for and assesses a tax on the amount the grantor obtained when selling the property.
There are exemptions up to a certain amount of the value of the capital gains tax for people who used that property as their primary residence for at least 2 of the last 5 years or who moved due to transfer orders from the United States government or a similar organization.
Delaware has its own capital gains tax, as laid out in Del. Code Title 30 Chapter 11. Delaware may have different rates for people who live in the state and those who live outside it. Consult a tax professional to make sure you fully understand your tax burden as assessed by the state.
