[Adopted 11-13-2007 by Ord. No. 07-11]
A.
DOCUMENT
As used in the article, except where the context clearly
indicates a different meaning, the following terms shall have the
meanings indicated:
Any deed, instrument or writing whereby any real estate within
the Town of Millville, or any interest therein, shall be quitclaimed,
granted, bargained, sold or otherwise conveyed to the grantee, but
shall not include the following:
(1)
Any will;
(3)
Any mortgage;
(4)
Any conveyance between corporations operating housing
projects pursuant to 31 Del. C. Chapter 45 and the shareholders thereof;
(5)
Any conveyance between nonprofit industrial development
agencies and industrial corporations purchasing from them;
(6)
Any conveyance to nonprofit industrial development
agencies;
(7)
Any conveyance between husband and wife;
(8)
Any conveyance between persons who were previously
husband and wife, but who have since been divorced; provided such
conveyance is made after the granting of the final decree in divorce
and the real estate or interest therein subject to such conveyance
was acquired by the husband and wife, or husband or wife, prior to
the granting of the final decree in divorce;
(9)
Any conveyance between parent and child or the spouse
of such a child;
(10)
Any conveyance:
(a)
To a trustee, nominee or straw party for the grantor as beneficial
owner;
(b)
For the beneficial ownership of a person other than the grantor where,
if such person were the grantee, no tax would be imposed upon the
conveyance pursuant to this article; or
(c)
From a trustee, nominee or straw party to the beneficial owner;
(11)
Any conveyance between a parent corporation
and a wholly-owned subsidiary corporation, provided such conveyance
is without actual consideration;
(12)
Correctional deeds without actual consideration;
(13)
Any conveyance to or from the United States
or the State of Delaware, or to or from any of their instrumentalities,
agencies or political subdivisions and the University of Delaware;
(14)
Any conveyance to or from a corporation, or
a partnership, where the grantor or grantee owns stock of the corporation
or an interest in the partnership in the same proportion as the grantor's
or grantee's interest in, or ownership of, the real estate being conveyed;
provided, however, that this subsection shall not apply to any distribution
in liquidation or other conveyance resulting from the partial or complete
liquidation of a corporation, unless the stock of the corporation
being liquidated has been held by the grantor or grantee for more
than three years; provided, further, this paragraph shall not apply
to any conveyance from a partnership to its partners unless the partners'
interest in the partnership has been held for more than three years;
(15)
Any conveyance by the owner of previously occupied
residential premises to a builder of new residential premises when
such previously occupied residential premises are taken in trade by
such builder as a part of the consideration from the purchaser of
new, previously unoccupied premises;
(16)
Any conveyance to the lender holding a bona
fide mortgage, which is genuinely in default, either by a sheriff
conducting a foreclosure sale or by the mortgagor in lieu of foreclosure;
(17)
Any conveyance to a religious organization or other body or person holding title to real estate for a religious organization, if such real estate will not be used following such transfer by the grantee, or by any privy of the grantee, for any commercial purpose; provided, however, that only that portion of the tax which is attributable to and payable by the religious organization or other body or person holding title to real estate for a religious organization under § 132-4 of this article shall be exempt;
(18)
Any conveyance to or from a volunteer fire company, organized under the laws of the State of Delaware; provided, however, that only that portion of the tax which is attributable to and payable by the volunteer fire company under § 132-4 of this article shall be exempt;
(19)
Any conveyance of a "mobile home" as defined
in 25 of Del. C. § 7003, provided tax on said conveyance
has been paid under 30 Del. C. § 3002;
(20)
Any conveyance without consideration to an organization
exempt from tax under § 501(c)(3) of the Federal Internal
Revenue Code [26 U.S.C. § 501(c)(3)];
(21)
Any conveyance to a nonprofit conservation organization
when the property is purchased for open space preservation purposes;
(22)
Any conveyance to or from an organization exempt
from tax under § 501(c)(3) of the Federal Internal Revenue
Code when the purpose of said conveyance is to provide owner-occupied
housing to low- and moderate-income households by rehabilitating residential
properties and reselling said properties without profit;
(23)
TRANSACTION
VALUE
Any conveyance between siblings, half siblings,
or step sibling;
The making, executing, delivering, accepting or presenting
for recording of a document.
In the case of any document granting, bargaining, selling
or otherwise conveying any real estate or interest or leasehold interest
therein, the amount of the actual consideration thereof, including
liens or other encumbrances thereon and ground rents, or a commensurate
part of the liens or other encumbrances and ground rents which encumber
the interest in real estate and any other interest in real estate
conveyed, provided that in the case of a transfer for an amount less
than the highest appraised full value of said property for local real
property tax purposes, "value" shall mean the highest such appraised
value unless the parties or one of them can demonstrate that fair
market value is less that the highest appraised value, in which case
"value" shall mean fair market value, or actual consideration, whichever
is greater. A demonstration that the transaction was at arm's length
between unrelated parties shall be sufficient to demonstrate that
the transaction was at fair market value.
B.
The term "document" defined in Subsection A of this section shall include the following:
(1)
Any writing purporting to transfer of title interest
or possessory interest for a term of more than five years in a condominium
unit or any unit properties subject to the Unit Property Act;
(2)
Any writing purporting to transfer a title interest
or possessory interest of any lessee or other person in possession
of real estate owned by the State of Delaware or other political subdivision
thereof;
(3)
Any writing purporting to assign or transfer a leasehold
interest or possessory interest in residential property under a lease
for a term of more than five years. For this purpose, the term "residential
property" means any structure or part of structure which is intended
for residential use, and excluding any commercial unit subject to
tax under 30 Del. C. § 2301(a)(6), relating to commercial
lessors.[1]
C.
In determining the term of a lease under Subsection B above, it shall be presumed for the purpose of computing the lease term that any rights or options to renew or extend will be exercised.
D.
For purposes of the definition of "value" in Subsection A, in the case of a document described in Subsection B under which the consideration is based in whole or in part on a percentage of the income or receipts to be received in the future, actual consideration shall include the amounts actually received under such percentage of income or receipts provision; provided, however, and notwithstanding any other provisions of this article, that the tax imposed by this article shall be due and payable to the Division of Revenue within 30 days after the date such amounts become due and payable under the agreement.
E.
Conveyance of interest.
(1)
Except as provided in Subsections E(2) and (3), where beneficial ownership in real estate in the State of Delaware is transferred through a conveyance or series of conveyances of intangible interest, including mergers and all other indirect exchanges, in a corporation, limited liability company, partnership, trust, pass-through entity or other entity, such conveyance shall be taxable under this article as if such property were conveyed through a duly recorded "document" as defined in Subsection A of this section, and subject to the exemptions contained therein, except those exemptions contained in Subsections A(10) and (14) in the definition of "document" in this section.
(2)
No bona fide pledge of stock or limited liability
membership interest, or partnership interest as loan collateral nor
any transfer of publicly traded stock; publicly traded limited liability
company member interest or publicly traded partnership interest shall
be deemed subject to taxation under this subsection.
(3)
Where the beneficial owners of real property, prior
to the conveyance or series of conveyances referred to in this subsection,
own 80% or more of the beneficial interest in the real estate following
said conveyance or conveyances, such transfers shall not be subject
to tax under this subsection. Where the beneficial owners of real
property, prior to the conveyance or series of conveyances referred
to in the subsection, own less than 80% of the beneficial interest
in the real estate following said conveyance or conveyances, such
transfers shall not be subject to tax under this subsection, unless,
under regulations promulgated by the Secretary of Finance for the
State of Delaware and the Town of Millville, such transfer or transfers
are properly characterized as a sale of real property. Such characterization
shall take into account the timing of the transaction, beneficial
ownership prior to and subsequent to the conveyance or conveyances;
the business purpose of the corporation, limited liability company,
partnership, trust, pass-through entity or other entity, and such
other factors as may be relevant.
F.
Building construction.
(1)
Notwithstanding Subsection A of this section, there shall be included in the definition of "document" for purposes of this article any contract or other agreement or undertaking for the construction of all or a part of any building all or a portion of which contract, agreement or undertaking (or any amendment to the foregoing) is entered into, or labor or materials are supplied, either prior to the date of the transfer of the land on which the building is to be constructed or within one year from the date of the transfer to the grantee.
(2)
No jurisdiction in the State of Delaware shall issue
a building permit for any such building unless and until the person
or person (including corporation or other associations) requesting
such permit shall demonstrate in whatever form may be specified by
the Director of Revenue for the State of Delaware, including at the
Director's discretion, a form of affidavit, that:
(a)
No transfer as described in this article has
occurred within the preceding year;
(b)
No portion of the contract for construction
for which the permit is being requested was entered into and no materials
or labor with respect to the building have been provided within one
year of the date on which the property was transferred; or
(c)
There has been paid a realty transfer tax on
the document as defined in this article.
(3)
In addition, no certificate of occupancy relative
to any building on which a tax is provided by this subsection shall
be issued by the Town unless and until the owner recertifies the actual
cost of the building and pays any additional tax due as a result of
such recertification.
(4)
A "building" for purposes of this subsection shall
mean any structure having a roof supported by columns or walls which
structure is intended for supporting or sheltering any use or occupancy
but shall not include any alteration of or addition to any existing
building where the cost of said alteration or addition is less than
50% of the value of the property transferred.
(5)
A "transfer" for purposes of this subsection shall include any transfer made by a "document" as described in this section, other than this subsection, and shall not include any transaction excluded from the definition of "document" under the provisions of Subsection A(1) to (21) in the definition of "document" in this section.
A.
Every person who makes, executes, delivers, accepts or presents for recording any document, except as provided in § 132-3, or in whose behalf any document is made, executed, delivered, accepted or presented for recording shall be subject to pay for and in respect to the transaction, or any part thereof, a realty transfer tax at the rate of 1 1/2% of the value of the property represented by such document. Such tax shall be payable at the time of making, execution, delivery, and acceptance or presenting of such document for recording. Said tax is to be apportioned equally between grantor and grantee.
B.
No tax shall be imposed on conveyances when the actual
value of the property being transferred is less than $100.
C.
Notwithstanding Subsection A of this section, where a valid written contract is entered into prior to November 13, 2007, the tax for such a transfer shall be at the rate imposed prior to November 13, 2007.
D.
Every person who makes, executes, delivers, accepts
or presents for recording any document defined or described in this
article or in whose behalf any such document is made, executed, delivered,
accepted or presented for recording shall be subject to pay for and
in respect to the transaction or any part thereof a realty transfer
tax at the rate of 1 1/2% of the value of the property represented
by such document which tax shall be payable as follows:
(1)
The tax on the consideration attributable to the first
year of the term shall be payable at the time of making, executing,
delivering, acceptance or presenting of such document for recording.
(2)
The tax on the consideration attributable to each
successive year of the term thereafter shall be paid annually to the
Town of Millville.
E.
There shall be no tax imposed on any document described in § 132-3B of this section entered into prior to November 13, 2007.
F.
Notwithstanding Subsection A of this section, for the first transfer tax payment on a property annexed into the Town between January 1, 2017, and January 1, 2019, inclusive, the tax for the first taxable transfer following annexation shall be at the rate of 0.75% of the value of the property; however, no transfer tax abatement under this subsection will be available after January 1, 2019.
[Added 10-10-2017 by Ord.
No. 18-03]
Where there is a transfer of a residential property
by a licensed real estate broker, which property was transferred to
the broker within the preceding year as part of the consideration
for the purchase of other residential property, a credit for the amount
of the tax paid at the time of the transfer to the broker shall be
given to the broker toward the amount of the tax due upon the transfer.
If the tax due upon the transfer from the licensed real estate broker
is greater than the credit given for the prior transfer, the difference
shall be paid, and, if the credit allowed is greater than the amount
of the tax due, no refund shall be allowed.
The tax imposed by this article shall be fully paid and have priority out of the proceeds of any judicial sale of real estate before any other obligation, claim, lien, judgment, estate or costs of the sale and of the writ upon which the sale is made, and the Sheriff, or other officer conducting said sale, shall pay the tax imposed out of the first moneys paid to the Sheriff or other officer in connection therewith, provided that if prior to delivery of the deed pursuant to the said sale, the purchaser shall deliver to the Sheriff an affidavit as described in § 132-11 of this article, that the transfer is exempt from tax under Subsection A(16) of the definition of "document" in § 132-3 of this article, the Sheriff shall not pay the tax, but shall deliver the affidavit to the Recorder of Deeds as agent for the Department of Finance for the State of Delaware and the Town of Millville.
A.
Upon payment of the tax due under this article, the
Town's authorized agent at the bank in which the Town real estate
transfer tax account is located shall stamp the document with an official
seal of the Town of Millville stating "Town of Millville Real Estate
Transfer Tax; Serial No. _____; Amount of Town Tax _____; Date Recorded
_____; Authorized Agent _____."
B.
No document shall be accepted for recording that does
not have such stamp or seal thereon, and the recording of any document
not bearing such seal shall be voidable at the Town's election.
A.
The Town shall prescribe, prepare and furnish stamps
of such denominations and quantities as may be necessary for the payment
of the tax imposed and assessed by this article. The Town shall make
provisions for the sale of such stamps in such places as it may deem
necessary.
B.
The Town may appoint the Recorder of Deeds in Sussex
County, and other persons within or without the state, as agents for
the sale of stamps to be used in paying the tax imposed by this article
upon documents and may allow a commission to said agents of 1% of
the face value of the stamps. The commissions allowed to the Sussex
County Recorder of Deeds shall be turned over to the County Treasurer
in which the tax is collected for the use of Sussex County.
C.
The Town shall pay the premium on any bond required
by the Department of Finance to be procured by any agent for the performance
of the agent's duties under this article.
The Town shall enforce this article and may
adopt and enforce rules and regulations relating to:
No document upon which tax is imposed by this article shall be recorded in the office of the Sussex County Recorder of Deeds unless proof of the payment of the realty transfer tax appears on the document as is provided in § 132-7 of this article.
Every document when lodged with or presented to the Sussex County Recorder of Deeds for recording shall set forth therein and as a part of such document the true, full and complete value thereof, or shall be accompanied by an affidavit executed by a responsible person connected with the transaction showing such connection and setting forth the true, full and complete value thereof and the reason, if any, why such document is not subject to tax under this chapter, provided that in the case of a transaction exempt from tax under Subsection A(16) of the definition of "document" in § 132-3 of this article, the affidavit shall be made by the grantee.
