[Adopted 11-8-1974 as Ch. 7, Art. I, of the 1974 Code]
As used in this article, the following terms
shall have the meanings indicated:
Includes any instrument or writing pursuant to which title or possession of any real estate situate within the corporate limits of the City which shall be quitclaimed, granted, bargained, sold, conveyed or transferred by a seller, vendor, grantor, assignor or transferor to any purchaser, buyer, vendee, grantee, assignee or transferee, except as provided in § 245-2.
Includes any document or instrument in writing transferring
or purporting to transfer a title or possessory interest by a seller,
vendor, lessor, assignor or transferor to any purchaser, buyer, vendee,
lessee, assignee or transferee in or to any of the following:
A condominium unit or any property or properties
subject to the Unit Property Act (25 Del. C. § 2201 et seq.)
for a determinable term of five years or more.
An interest in land owned by another and/or
improvements owned by another located on land owned by another for
a determinable term of five years or more.
The exercise of any right or option to renew
or extend the title or possessory interest in an existing document
or instrument in writing when such renewal or extension is for a period
of five years or more.
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 or other political subdivision thereof.
[Added 7-20-1998 by Ord. No. 798-1]
Includes the making, executing, delivering, accepting or
presenting for recording of a deed or lease as defined herein.
[Amended 7-20-1998 by Ord. No. 798-1]
Includes, in the case of a deed or lease, the amount of the
actual consideration thereof, including liens or other encumbrances
thereon and ground rents or commensurate part of the liens or other
encumbrances thereon which encumber the interest in real estate and
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, lands, tenements or hereditaments pursuant to the
amount of the assessment as shown on the books of the City, "value"
shall mean the highest such appraised value unless the parties, or
one of them, can demonstrate that fair market value is less than 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.
[Amended 7-20-1998 by Ord. No. 798-1]
[Amended 4-8-1994 by Ord. No. 494-3; 1-16-2001 by Ord. No.
0101-1]
As used in this article, deed and lease shall
not include any of the following:
A.
Any conveyance by will.
B.
Any mortgage.
D.
Any conveyance between corporations operating housing
projects pursuant to the laws of the state.
E.
Any conveyance between nonprofit industrial developments
agencies and industrial corporations purchasing from them.
F.
Any conveyance to nonprofit industrial development
agencies.
G.
Any conveyance between husband and wife.
H.
Any conveyance between persons who were previously
husband and wife, but who have since been divorced, provided that
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.
I.
Any conveyance between parent and child or a spouse
of such child.
J.
Any conveyance to a trustee, nominee or straw party
for the grantor as beneficial owner; for the beneficial ownership
of a person other than a grantor where, if such person were the grantee,
no tax would be imposed upon the conveyance pursuant to this article;
or from a trustee, nominee or straw party to the beneficial owner.
K.
Any conveyance for the beneficial ownership of a person
other than a grantor, where, if such person were the grantee, no tax
would be imposed upon the conveyance pursuant to this article.
L.
Any conveyance from a trustee, nominee or straw party
to the beneficial owner.
M.
Any conveyance between a parent corporation and a
wholly owned subsidiary corporation, provided that such conveyance
is without actual consideration.
N.
Correctional deed without actual considerations.
O.
Any conveyance to or from the United States, the State
of Delaware, any instrumentality, agency or political subdivision
of the state, and the University of Delaware.
[Amended 7-20-1998 by Ord. No. 798-1]
P.
Any conveyance to or from a volunteer fire company,
organized under the laws of this state; provided, however, that only
that portion of the tax which is attributable to and payable by the
volunteer fire company under § 5402 of Title 30 of the Delaware
Code shall be exempt.
[Amended 7-20-1998 by Ord. No. 798-1]
Q.
Any conveyance by the owner of a previously occupied
residential premises to a builder of new residential premises when
such previously occupied residential premises were taken in trade
by such builder as a part of the consideration from the purchaser
of new, previously unoccupied premises.
R.
Any conveyance from the purchase money mortgagor to
the lender holding the purchase money mortgage, whether pursuant to
a foreclosure or in lieu thereof.
S.
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
and payable by the religious organization or other body or person
holding title to real estate for a religious organization pursuant
to 30 Del. C. § 5402 shall be exempt.
[Amended 7-20-1998 by Ord. No. 798-1]
T.
Any conveyance made pursuant to a contract executed
prior to December 1, 1973.
U.
Any conveyance made by or to an individual, a corporation
or partnership when there is no change in beneficial interest.
V.
Any conveyance made by or to any organization exempt
from ad valorem real estate taxes.
W.
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 his 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,
that this subsection 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.
X.
Any conveyance of a mobile home as defined in 25 Del.
C. § 7003, provided tax on said conveyance has been paid
pursuant to 30 Del. C. § 3002.
[Added 7-20-1998 by Ord. No. 798-1]
Y.
Any conveyance without consideration to an organization
exempt from tax under Section 501(c) of the Federal Internal Revenue
Code [26 U.S.C. § 501(c)3].
[Added 7-20-1998 by Ord. No. 798-1]
Z.
Any conveyance to a nonprofit conservation organization
when the property is purchased for open space preservation purposes.
[Added 7-20-1998 by Ord. No. 798-1]
AA.
Any conveyance between siblings, half-siblings or
step-siblings.
[Amended 4-8-1994 by Ord. No. 494-3]
A.
Every person who makes, executes, delivers, accepts or presents for recording any deed or lease, except as excluded by § 245-2, or in whose behalf any deed or lease 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 deed or lease. Such tax shall be payable at the time of making, execution, delivery, acceptance or presenting of such document for recording.
[Amended 7-20-1998 by Ord. No. 798-1]
B.
The transfer tax shall be apportioned equally between
the parties to the transaction in the absence of an agreement to the
contrary.
C.
No tax shall be imposed on any conveyance when the
actual value of the property being transferred is less than $100.
E.
The provisions of this article which increase the City's realty transfer tax to 1 1/2% in Subsection A and 3/4 of 1% in Subsection D above shall not become effective until the conditions regarding the defeasance of the Delaware Realty Transfer Tax Revenue Bonds have been met pursuant to Chapter 16 of Title 22 of the Delaware Code.
[Added 7-20-1998 by Ord. No. 798-1]
F.
Any funds realized by the City from the City's realty
transfer tax pursuant to this section shall be segregated from the
City's general fund, and the funds, and all interest thereon, shall
be expended solely by the City for the capital and operating costs
of public safety services, economic development programs, public works
services, capital projects and improvements, infrastructure projects
and improvements and debt reduction.
[Added 7-20-1998 by Ord. No. 798-1]
Where there is a transfer of residential property
by a licensed real estate broker which property was transferred to
him within 12 months next preceding the transfer by him 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 licensed real estate broker shall be given toward the amount
of 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. 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 paid
from the proceeds of any judicial sale of real estate as part of the
costs of such sale before any such proceeds are applied toward any
obligation, claim, lien, judgment or estate and of the writ upon which
the sale is made.
The payment of the tax imposed by this article
shall be evidenced by the fixing of a documentary stamp to every deed
or lease by the person making, executing, delivering or presenting
such deed or lease for recording. Such stamp shall be affixed in such
manner that their removal will require the continued application of
steam or water, and the person using or affixing such stamp shall
write, stamp or cause to be written or stamped thereon the initials
of his name and the date upon which such stamp is affixed or used
so that such stamp may not again be used, provided that any other
method of cancellation may be used if it is deemed expedient by the
City Manager. The City Manager may provide for the evidence of payment
of the tax to be shown on the deed or lease by means other than the
affixing of documentary stamps.
The City Manager 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
City Manager shall make provision from the sale of such stamps in
such places as he may deem necessary.
[Amended 12-16-1985 by Ord. No. 1285-2]
A.
The City Manager may appoint the Recorder of Deeds,
in and for Sussex County, Mellon Bank (Delaware) N.A., and such other
persons within or without the county as agents for the sale of stamps
to be used in paying the tax imposed by this article.
B.
A commission shall be allowed by the City Manager
to such agents of 2% of the face value of the stamps. The commission
allowed to the Recorder of Deeds, in and for Sussex County, shall
be turned over to the County Treasurer for the use of the county.
No deed or lease upon which a tax is imposed
by this article shall be recorded in the office of the Recorder of
Deeds, in and for Sussex County, unless proof of the payment of the
transfer tax appears on the document.
Every deed or lease when lodged with or presented
to the Recorder of Deeds, in and for Sussex County, for recording
shall set forth therein as part of such deed or lease 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 or the reason, if any, why such deed or lease is not subject
to tax under this article.
No person shall commit any of the following
acts:
A.
Make, execute, deliver, accept or present for recording
or cause to be made, executed, delivered, accepted or presented for
recording any document without the full amount of tax thereon being
duly paid.
B.
Make use of any documentary stamp to denote payment
of the realty transfer tax without canceling such stamp as required
by this article.
C.
Fraudulently cut, tear or remove from a deed or lease
any documentary stamp or other evidence of payment of the transfer
tax.
D.
Fraudulently affix to any deed or lease upon which
tax is imposed by this article any documentary stamp or other evidence
of payment of the transfer tax which has been removed from any other
document, any documentary stamp or other evidence of payment of the
transfer tax if insufficient value, any forged or counterfeited stamp
or other evidence of payment of the realty of the transfer tax or
any impression, forged or counterfeited stamp, dye, plate or other
articles.
E.
Willfully remove or alter the cancellation marks of
any documentary stamp or restore any such documentary stamp with intent
to use or cause the stamp to be used after it has already been used,
or knowingly buy, sell, offer for sale, give away or use any such
altered or restored stamp to any person for use.
F.
Knowingly have in his possession any altered or restored
documentary stamp which has been removed from any deed or lease upon
which tax is imposed by this article, provided that the possession
of such stamp shall be prima facie evidence of an intent to violate
the provisions of this article.
G.
Knowingly or willfully prepare, keep, sell, offer
for sale or have in his possession any forged or counterfeited documentary
stamp.
H.
Accept for recording in the office of the Recorder
of Deeds, in and for Sussex County, any deed or lease upon which the
transfer tax is imposed without the proper documentary stamp or other
evidence of payment of the tax required by this article and as is
indicated in such deed or lease or accompanying affidavit.
A.
If any person shall fail to pay any transfer tax imposed
by this article for which he is liable, the City Manager may make
a determination of additional tax and interest due by such person,
based upon any information within his knowledge or learned by him.
All such determinations shall be made so that notice thereof shall
reach the party or parties against whom it is made within three years
after the date of the recording of the deed of lease.
B.
Promptly after the date of such determination, the
City Manager shall send, by certified or registered mail with return
receipt requested, with postage prepaid, a copy thereof to the person
against whom it was made.
C.
Within 90 days after the date upon which the copy
of determination of additional tax was mailed, such person may file
with the City Manager a petition for redetermination of such tax.
Every petition for redetermination shall state specifically the reason
or reasons which the petitioner believes entitle him to such redetermination
and shall be supported by affirmation that it is not made for the
purpose of delay, and that the facts set forth therein are true and
correct.
D.
It shall be the duty of the City Manager within six
months after the date of any determination to dispose of any petition
for redetermination. Notice of the action taken upon petition for
redetermination shall be given to the petitioner promptly after the
date of redetermination by the City Manager.
E.
Any person shall have the right to review by a court
of competent jurisdiction of any determination made by the City Manager
pursuant to this section.
F.
Interest shall be added to any determination of additional
tax and shall be computed at the rate of 6% per year from the date
any transfer tax shall have been paid to the date paid.
Upon determination of any tax collected with
respect to this article has been collected improperly, the City Manager
shall refund to the tax payer the sum so paid with interest from the
date of payment at the rate of 6% per annum.
[Added 4-8-1994 by Ord. No. 494-3]
A.
Where beneficial ownership in real estate is transferred through a conveyance or series of conveyances of intangible interests in a corporation, partnership or trust, such conveyance shall be taxable under this article as if such property were conveyed through a duly recorded deed or lease as defined in § 245-1, and subject to the exemptions contained in § 245-2.
B.
No bona fide pledge of stock or partnership interests
as loan collateral nor any transfer of publicly traded stock or publicly
traded partnership interests shall be deemed subject to taxation under
this section.
C.
Where the beneficial owners of real property prior
to the conveyance or series of conveyances referred to in this section
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 section. Where the beneficial owners of real property
prior to the conveyance or series of conveyances referred to in this
section 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 section, unless, under regulations promulgated
by the Secretary of Finance of the State of Delaware, 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, partnership
or trust; and such other factors as may be relevant.
[Added 4-8-1994 by Ord. No. 494-3]
A.
There shall be included in the definition of "deed"
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.
B.
The Building Inspector shall not issue a building
permit for any such building unless and until the person or persons
(including corporations or other associations) requesting such permit
shall demonstrate in whatever form may be specified by the Building
Inspector, including, at his discretion, a form of affidavit, that:
(1)
No transfer as described in this section has occurred
within the preceding year;
(2)
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
(3)
There has been paid a realty transfer tax on the document
as defined in this section.
C.
In addition, the Building Inspector shall not issue
a certificate of occupancy relative to any building on which a tax
is provided by this section unless and until the owner recertifies
the actual cost of the building and pays any additional tax due as
a result of such recertification.
D.
A "building" for purposes of this section 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 an existing building
where the cost of said alteration or addition is less than 50% of
the value of the property transferred.
