[Adopted 8-7-1995 by Ord.
No. LXIX]
As used in this article, the following definitions shall be applicable
unless the context clearly indicates a different meaning:
BUILDING
Includes any structure having a roof supported by columns or walls,
which structure is 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.
DEED
Includes any instrument or writing pursuant to which title or possession of any real estate within the corporate limits of the town shall be quitclaimed, granted, bargained, sold, conveyed or transferred to any purchaser, buyer, vendee, grantee, assignee or transferee, except as provided in §
183-2 of this article.
DOCUMENT
A.
Any deed, lease, instrument or writing whereby any real estate within
the corporate limits of the town, or any interest therein, shall be quitclaimed,
bargained, sold, leased or otherwise conveyed to the grantee; also includes
any contract or other agreement or undertaking for the construction of all
or 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.
There shall be included in this definition 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.
[Added 8-3-1998]
(1)
No building permit shall be issued 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 Mayor and Council a form of affidavit that:
(a)
No transfer as described in this section has occurred within the preceding
year;
(b)
No portion of the contract for construction for which the permit is
requested was entered into and no materials or labor with respect to the building
has 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 chapter.
(2)
In addition no certificate of occupancy shall be issued relative to
any building on which a tax was provided by this chapter unless and until
the owner recertifies the actual cost of the building and pays an additional
tax due as a result of such recertification.
(3)
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 an existing building where the cost of said alteration or
addition is less than 50% of the value of the property transferred.
(4)
A "transfer" for purposes of this subsection shall include any transfer made by a deed as described in this chapter, other than this subsection, and shall not include any transaction excluded from the definition of "deed" under the provisions of §
183-2.
LEASE
Includes any document, 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.
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.
B.
An interest in land owned by another or improvements owned by another
located on land owned by another, or both, for a determinable term of five
years or more.
C.
The exercise of any right or option to renew or extend the title or
possessory interest in an existing document or instrument in writing where
such renewal or extension is for a period of five years or more.
TRANSACTION
Includes the making, executing, delivering, accepting or presenting
for recording of a deed or lease as defined herein.
VALUE
In the case of any document granting, bargaining, selling or otherwise
conveying any real estate or interest or leasehold interest therein, the amount
of 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 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.
A.
Except as provided in Subsections
B and
C of this section, 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 document.
B.
No bona fide pledge of stock or partnership interests as loan collateral
nor any transfer of publicly traded stock or publicly traded partnership interest
shall be deemed subject to taxation under this subdivision.
C.
Where the beneficial owners of real property prior to the conveyance
or series of conveyances referred to in this subdivision 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 subdivision. Where the
beneficial owners of real property prior to the conveyance or a series of
conveyances referred to in this subdivision 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 subdivision, unless under
regulations promulgated by the Secretary of Finance, pursuant to 30 Del. C.
§ 5401, 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.
As used in this article, "deed" and "lease" shall not include any of
the following:
B. Any lease other than those described or defined in §
183-1 of this article.
C. Any conveyance between corporations operating housing
projects pursuant to Delaware Code, Title 31, Chapter 45, and the shareholders
thereof.
D. Any conveyance between nonprofit industrial development
agencies and industrial corporations purchasing from them.
E. Any conveyance to nonprofit industrial development agencies.
F. Any conveyance between husband and wife.
G. 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 a final decree in the divorce and the real estate
or interest therein subject to such conveyance was required by the husband
and wife, or husband or wife, prior to the granting of the final decree of
divorce.
H. Any conveyance between parent and child or the spouse
of such a child.
I. Any conveyance:
(1) To a trustee, nominee or straw party for the grantor
as a beneficial owner.
(2) 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.
(3) From a trustee, nominee or straw party to the beneficial
owner.
J. Any conveyance between a parent corporation and a wholly
owned subsidiary corporation, provided that such conveyance is without actual
consideration.
K. Correctional deeds without actual consideration.
L. Any conveyance to or from the United States or this state,
or to or from any other instrumentalities, agencies or political subdivisions
and the University of Delaware.
M. 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 corporation in the same proportion as his interest in, or ownership
of, the real estate being conveyed; provided, however, that this subsection
shall not be applicable to any distribution and 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, and provided, further, that this exemption
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.
N. Any conveyance by the owner of previously occupied residential
premises to a builder of new residential premises when 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.
O. 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.
P. Any conveyance to a religious corporation 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 corporation or other body or person holding title to real estate for a religious corporation under §
183-3 of this article shall be exempt.
Q. Any conveyance made by or to any organization exempt
from ad valorem real estate taxes.
S. 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)].
T. Any conveyance to a nonprofit conservation organization
when the property is purchased for open space preservation purposes.
U. 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 §
183-3 shall be exempt.
[Added 8-3-1998]
V. Any conveyance of a "mobile home," defined as a manufactured
home, transportable in one or more sections, which, in the traveling mode,
is 8 body feet or more in width and 40 body feet or more in length or, when
erected on site, is 320 or more square feet; it is built on a permanent chassis,
designed to be used as a year-round dwelling with or without a permanent foundation
when connected to the required utilities and, if manufactured since June 15,
1976, has been built in accordance with the National Manufactured Home Construction
and Safety Standards (as found in 25 Del. C. § 7003), provided that
tax on said conveyance has been paid under 30 Del. C. § 3002.
[Added 8-3-1998]
W. Any conveyance between siblings, half-siblings or step-siblings.
[Added 7-2-2001]
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 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. If the credit allowed
is greater than the amount of the tax due, no refund shall be allowed.
The realty transfer 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 such sale is made, unless such transfer is exempt pursuant to the provisions of §
183-2O.
The payment of the tax imposed by this article shall be evidenced by
the affixing of a documentary stamp to every document, deed or lease by the
person making, executing, delivering or presenting such document, deed or
lease for recording. Such stamp shall be affixed in such manner that its 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 Town Clerk.
The Town Clerk may provide for the evidence of payment of the tax to be shown
on the document, deed or lease by means other than the affixing of documentary
stamps.
The Town Clerk 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 Clerk shall make provision for the sale
of such stamps in such places as may be deemed necessary.
No document, deed or lease upon which a transfer 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 document, 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 document, 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 document, 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, deed or lease without the full amount of tax thereon being duly
paid.
B. Make use of any documentary stamps to denote payment
of the realty transfer tax without canceling stamp as required by this article.
C. Fraudulently cut, tear or remove from a document, deed
or lease any documentary stamp or other evidence of payment of the transfer
tax.
D. Fraudulently affix to any document, 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 counterfeit stamp or other evidence of payment
of the realty 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 within 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 document, deed or lease
upon which the realty transfer 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 counterfeit documentary stamp.
H. Accept for recording in the office of the Recorder of
Deeds, in and for Sussex County, any document, deed or lease upon which the
transfer tax is imposed without the proper documentary stamp or other evidence
of payment of the transfer tax required by this article and as indicated in
such document, deed or lease or accompanying affidavit.
[Amended 7-6-1998; 10-5-1998]
A. Any person who violates any of the provisions of this
article shall be deemed to be guilty of a misdemeanor and, upon conviction
in a court of competent jurisdiction, shall be fined not more than $500 or
be imprisoned for a term not to exceed one year, or both, and shall pay the
costs of prosecution.
B. The amount due shall bear interest at the legal rate
established by Delaware law, commencing with the date that such document is
duly recorded in the Sussex County Recorder of Deeds office, and the transferee
in such transaction shall be personally liable for the full amount of such
tax, plus all accrued interest to date of payment.
C. The amount of such tax, together with the accrued interest
thereon, shall constitute a charge or assessment against the property so transferred
and shall be a lien against the property so transferred in accordance with
the procedures set forth in the Charter of the town and/or in accordance with
the procedures set forth in the general statutes of the state regarding municipal
liens. If suit should be brought by the town to collect such delinquent tax,
then the town shall be entitled, in addition to the principal amount owed
plus accrued interest, to be reimbursed for its reasonable attorneys' fees
and court costs.
D. Where any document involved in a transaction subject
to the tax imposed by this article is recorded without payment thereof, such
recording shall constitute a violation, and the grantee shall, upon conviction
before any court of competent jurisdiction, pay a fine of $1,000, plus any
applicable court costs and assessments.