Town of Elsmere, DE Article II Realty Transfer Tax

[Adopted 8-8-1968 by Ord. No. 95]

§ 204-4 Definitions.

When used in this article, the following definitions apply:

DOCUMENT

Any deed, instrument or writing whereby any real estate within this state, or any interest therein, shall be quitclaimed, granted, bargained, sold or otherwise conveyed to the grantee.

[Amended 12-12-1968 by Ord. No. 97; 5-30-1996 by Ord. No. 326; 12-12-2013 by Ord. No. 573]

A. "Document" shall not include the following:

(1) Any will;

(2) Any lease other than those described or defined in Subsection B of this section below;

(3) Any mortgage;

(4) Any conveyance between corporations operating housing projects pursuant to Chapter 45 of Title 31 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 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;

(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 chapter; 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 that such conveyance is without actual consideration;

(12) Correctional deeds without actual consideration;

(13) Any conveyance to or from the United States or this state, 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 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;

(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 30 Del. C. § 5402 shall be exempt;

(18) 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 30 Del. C. § 5402 shall be exempt;

(19) Any conveyance of a "manufactured home" as defined in Section 7003 of Title 25, provided that tax on said conveyance has been paid under 30 Del. C. § 3002;

(20) Any conveyance without consideration to an organization exempt from tax under Section 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) Any conveyance between siblings, half-siblings or stepsiblings.

B. The term "document" defined in Subsection A of this section shall include the following:

(1) Any writing purporting to transfer a 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 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 Paragraph (6) of Subsection (a) of § 2301 of Title 30 of the Delaware Code, relating to commercial lessors.

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 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 within 30 days after the date such amounts become due and payable under the agreement.

E. 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.

TAX COLLECTOR

The Tax Collector of the Town of Elsmere or any other person appointed by Council as Deputy Tax Collector for the purposes of this article. The remuneration of any Deputy Tax Collector or Tax Collectors shall be fixed by Council at the time of the appointment of such Deputy Tax Collector of Tax Collectors.

[Amended 9-12-1968 by Ord. No. 96]

TRANSFER

The making, executing, delivering, accepting or presenting for recording of any document whereby title to or interest in real property located within the Town is transferred or conveyed, regardless of where the document is executed, delivered or accepted.

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 the actual consideration thereof, including liens or other encumbrances thereon and ground rents, or a commensurate part of the liens or other encumbrances thereon and ground rents where such liens or other encumbrances and ground rents also encumber or are charged against other lands, tenements or hereditaments; provided that, where such documents shall set forth a small or nominal consideration, the "value" thereof shall be determined from the price set forth in, or actual consideration for, the contract of sale or lease, or, in the case of a gift or any other document without consideration, from the actual monetary worth of the property granted, bargained, sold or otherwise conveyed, which, in either event, shall not be less than the amount of the highest assessment of such lands, tenements or hereditaments for local tax purposes.

[Amended 5-30-1996 by Ord. No. 326]

§ 204-5 Taxable conduct.

[Amended by Ord. No. 359]

Every person who makes, executes, issues or delivers any document, or in whose behalf any document is made, executed, issued or delivered, shall pay therefor and in respect thereof, or for and in respect of the vellum, parchment or paper upon which such document is written or printed, a tax at the rate of 1.5% of the value of the property represented by such document, which tax shall be payable at the time of the making, execution, issuance or delivery of such document; provided, however, that no more than 1.5% tax shall be levied on any single transfer of property.[1]

[1] Editor's Note: Former Subsections (2) and (3), which immediately followed this subsection, were repealed 12-12-1968 by Ord. No. 97.

§ 204-5.1 (Reserved) [1]

[1] Editor's Note: Former § 204-5.1, First-time home buyer exemption, added 5-13-2010 by Ord. No. 515, was repealed 2-9-2012 by Ord. No. 544.

§ 204-6 Payment of tax.

A. The payment of the tax imposed by this article shall be evidenced by the affixing of a documentary stamp or stamps to every document by the person making, executing, issuing or delivering such document, regardless of the situs of the actual making, executing, issuing or delivering of such document.

B. Such stamps 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 stamps shall cause such stamps to be canceled in such manner that they may not be used again, either:

(1) By writing or stamping or by causing to be written or stamped thereon the initials of his name and the date upon which such stamps are affixed or used; or

(2) By complying with such other method of cancellation as the Tax Collector may prescribe.

C. Sheriff's sale. The tax herein imposed 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 herein imposed out of the first moneys paid to him in connection therewith, unless previously paid by any party; provided, however, that any tax imposed by the State of Delaware shall have priority over the tax improved under this article.

D. The value for determining the tax shall be the highest of the following:

(1) The bid price.

(2) The amount of the mortgage not in excess of the fair value of the real estate.

(3) The estimated full value.

§ 204-7 Additional functions of Tax Collector.

In addition to the Tax Collector's other duties:

A. The Tax Collector shall prepare and furnish adhesive stamps of such denominations and in such quantities as may be necessary for the payment of the tax imposed and shall make provisions for the sale of such stamps in such places as he may deem necessary.

B. The Tax Collector may by regulation provide for the evidence of the payment of the tax to be shown on the document by means other than the affixing of documentary stamps.

C. The Tax Collector is charged with the enforcement of this article and is authorized and empowered to prescribe, adopt, promulgate and enforce regulations relating to:

(1) The method to be used in affixing or canceling of stamps in substitution for, or in addition to, the method and means provided in this article.

(2) The denominations and sale of stamps.

(3) Any other matter or thing pertaining to the administration and enforcement of this article.

§ 204-8 Recordation.

A. No document shall be recorded in the Office of the Recorder of Deeds unless a documentary stamp or stamps shall have been affixed thereto as provided in this article.

B. The affixation of stamps to a document upon which a tax is imposed by this article, when lodged with or presented to the Recorder of Deeds, shall be an affirmation on the part of the transfer or transferors that the true, full and complete value of the transaction if fully reflected in the amount of the stamps affixed thereto.

C. Every document when lodged with or presented to the Recorder of Deeds 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 or the reason, if any, why such document is not subject to tax under this article.

§ 204-9 Violations and penalties.

[Amended 5-30-1996 by Ord. No. 326]

A. It shall be unlawful for any person to:

(1) 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;

(2) Make use of any documentary stamp to denote payment of the realty transfer tax without canceling such stamp as required by § 204-6B or as prescribed by the Tax Collector;

(3) Fail, neglect or refuse to comply with or violate the rules and regulations prescribed, adopted and promulgated by the Tax Collector under the provisions of this article;

(4) Fraudulently cut, tear or remove from a document any documentary stamp or other evidence of payment of the realty transfer tax;

(5) Fraudulently affix to any document upon which tax is imposed by this article any documentary stamp or other evidence of payment of the realty transfer tax which has been removed from any other document upon which tax is imposed by this article, or any documentary stamp or other evidence of payment of the realty transfer tax of insufficient value, or any forged or counterfeited stamp or other evidence of payment of the realty transfer tax or any impression of any forged or counterfeited stamp, die, plate or other article;

(6) Willfully remove or alter the cancellation marks of any documentary stamp, or restore any such documentary stamp, with intent to use or cause the same to be used after it has already been used, or knowingly buy, sell, offer for sale, or give away any such altered or restored stamp to any persons for use, or knowingly use the same;

(7) Knowingly have in his possession any altered or restored documentary stamp which has been removed from any document upon which tax is imposed by this article; provided that the possession of such stamps shall be prima facie evidence of an intent to violate the provisions of this clause;

(8) Knowingly or willfully prepare, keep, sell, offer for sale or have in his possession any forged or counterfeited documentary stamps; or,

(9) Accept for recording in the office of any Recorder of Deeds any document upon which the realty transfer tax is imposed, without the proper documentary stamp or other evidence of payment of the tax affixed thereto, as required by this article and as is indicated in such document or accompanying affidavit.

B. Whoever violates this article shall be fined not more than $500 and imprisoned for not more than one year, or both.

C. The Superior Court shall have jurisdiction over offenses under this section.