[HISTORY: Adopted by the Commissioners of the Town of Henlopen Acres as indicated in article histories. Amendments noted where applicable.]
As used in this article, the following definitions shall be applicable unless the context clearly indicates a different meaning:
- 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 § 108-2 of this article and shall include the following:
- A. Except as provided in Subsections B and C hereof where beneficial ownership in real estate is transferred through a conveyance or series of conveyances of an intangible interest 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 as defined herein and subject to the exemptions contained herein, except those exemptions contained in § 108-2J and N of this article.
- B. No bona fide pledge of stock or partnership interest as loan collateral nor any transfer of publicly traded stock or publicly traded partnership interest shall be deemed subject to taxation under this article.
- 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 transfer shall not be subject to tax under this article. Where the beneficial owner of real property prior to the conveyance or series of conveyances referred to in this article owns less than 80% of the beneficial interest in the real estate following said conveyance or conveyances, such transfer shall not be subject to tax under this article unless determined by the Town Manager to be 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.
- 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. 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.[Amended 7-10-1998]
- A. 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 Commissioners 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 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 article.
- B. In addition no certificate of occupancy shall be issued relative to any building on which a tax was provided by this article unless and until the owner recertifies the actual cost of the building and pays an additional tax due as a result of such recertification.
- C. 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.
- D. A transfer for purposes of this subsection shall include any transfer made by a deed as described in this article, other than this subsection, and shall not include any transaction excluded from the definition of "deed" under the provisions of § 108-1.
- 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.
- Includes the making, executing, delivering, accepting or presenting for recording of a deed or lease as defined herein.
- Includes in the case of a deed the amount of actual consideration thereof, including liens or other encumbrances thereon and ground rents or a commissary part of the liens or other encumbrances thereon and ground rents where such liens and encumbrances and ground rents also encumber or are charged against other lands, tenements or hereditaments, provided that where such documents set forth a small or nominal consideration, value 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 other document without consideration, from the actual monetary worth of the property granted, bargained, sold, leased or otherwise conveyed, which, in either event, shall not be less than the amount of assessment of such lands, tenements or hereditaments as shown on the books of the Town.
As used in this article, document, deed and lease shall not include any of the following:
Any conveyance by will.
Any conveyance between corporations operating housing projects pursuant to Chapter 45, Title 31, of the Delaware Code, and the shareholders thereof.
Any conveyance between nonprofit industrial development agencies and industrial corporations purchasing from them.
Any conveyance to nonprofit industrial development agencies.
Any conveyance between husband and wife.
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 acquired by the husband and wife, or husband or wife, prior to the granting of the final decree of divorce.
[Amended 7-9-1999 by Ord. No. 99-1]
Any conveyance between parent and child or the spouse of such a child.
To a trustee, nominee or straw party for the grantor as a beneficial owner;
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
From a trustee, nominee or straw party to the beneficial owner.
Any conveyance between a parent corporation or a wholly owned subsidiary corporation, provided that such conveyance is without actual consideration.
Correctional deeds without actual consideration.
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.
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 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; 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.
[Amended 7-9-1999 by Ord. No. 99-1]
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.
[Amended 7-9-1999 by Ord. No. 99-1]
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.
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 § 108-3 of this article shall be exempt.
[Amended 7-9-1999 by Ord. No. 99-1]
Any conveyance made by or to any organization exempt from ad valorem real estate taxes.
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 § 108-2 shall be exempt.
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)].
Any conveyance to a nonprofit conservation organization when the property is purchased for open space preservation purposes.
Any conveyance of a mobile home, defined as a manufactured home, transportable in one or more sections, which, in the traveling mode, is eight 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; provided, however, that tax on said conveyance has been paid pursuant to 30 Del. C. § 3002, Motor vehicle document fee; claims for refunds. [The definition of "mobile home" is found in 25 Del. C. § 7003(2).]
Any conveyance between siblings, half-siblings or stepsiblings.
Every person who makes, executes, delivers, accepts or presents for recording any document, deed or lease, except as provided in § 108-2, or in whose behalf any document, 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%, 1% pursuant to the Charter and 1/2% pursuant to Title 22 of the Delaware Code, Chapter 16, of the value of the property represented by such document, deed or lease. Such tax shall be payable at the time of making, execution, delivery, acceptance or presenting of such deed for recording.
The transfer tax shall be paid by the purchasers in the transaction in the absence of an agreement to the contrary.
No tax shall be imposed on any conveyance where the actual value of the property being transferred is less than $100.
Every person who makes, executes, delivers, accepts or presents for recording any document, deed or lease defined or described in this article or in whose behalf any such document, deed or lease is made, executed, delivered, accepted or presented for recording shall be subject to pay for and in respect to the transaction a realty transfer tax at the rate of 1 1/2%, 1% pursuant to the Charter and 1/2% pursuant to Title 22, Delaware Code, Chapter 16, of the value of the property represented by such document, deed or lease which tax shall be payable as follows:
The tax on the consideration attributable to the first year of the term shall be payable at the time of making, execution, delivery, acceptance or presenting of such document for recording.
The tax on the consideration attributable to each successive year of the term thereafter shall be paid annually to the Town Manager.
There shall be no tax imposed on any document, deed or lease presented for recording pursuant to a contract executed prior to August 1, 1990.
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 sale is made unless such transfer is exempt pursuant to the provisions of § 108-2, Subsection O.
The payment of the tax imposed by this article shall be evidenced by the fixing 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; 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 Manager. The Town Manager may provide through 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 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 Town Manager shall make provision for the sale of such stamps in such places as may be deemed necessary.
The Town Manager may appoint the Recorder of Deeds, in and for Sussex County, the Sussex Trust Company or such other person or persons within or without the County as agents for the sale of stamps as used for payment of the tax imposed by this article.
A commission shall be allowed by the Town Manager to such agents of 2% of the face value of the stamps.
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:
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.
Make use of any documentary stamps to denote payment of the realty transfer tax without canceling stamp as required by this article.
Fraudulently cut, tear or remove from a document, deed or lease any documentary stamp or other evidence of payment of the transfer tax.
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 of 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.
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.
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.
Knowingly or willfully prepare, keep, sell, offer for sale or have in his possession any forged or counterfeit documentary stamp.
Accept for recording in the Office of the Recorder 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.
If any person shall fail to pay any transfer tax imposed by this article for which he is liable, the Town Manager may make a determination of additional tax and interest due by such person, based upon 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 recording of the document, deed or lease.
Promptly after the date of such determination, the Town Manager shall send, by certified or registered mail with return receipt requested with postage prepaid, a copy thereof to the person against whom it is made.
Within 90 days after the date upon which the copy of determination of additional tax was mailed, such person may file with the Town Manager a petition for redetermination of such tax. Every petition for redetermination shall state specifically the reason or reasons which petition believes entitles him to such redetermination and shall be supported by affirmation that it is not for the purpose of delay, and that the facts set forth therein are true and correct.
It shall be the duty of the Town 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 Town Manager.
Any person shall have the right to review by a court of competent jurisdiction any determination made by the Town Manager pursuant to this section.
Interest shall be added to any determination of additional tax and shall be computed at the statutory rate from the date any transfer tax shall have been paid to the date paid.
Upon determination that any tax collected pursuant to this article has been collected improperly, the Town Manager shall refund to the taxpayer the sum so paid with interest from the date of payment at the rate of 9% per annum.
[Amended 7-9-1999 by Ord. No. 99-1]
Where any real property within the Town is transferred without payment of the appropriate real estate transfer tax in violation of this article:
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 action shall be personally liable for the full amount of such tax, plus all accrued interest to date of payment.
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.
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.
There is hereby imposed a tax on gross rental receipts as follows: In the Residential Zone for the rental of single-family dwelling units, and nonconforming dwellings that were in existence prior to the enactment of applicable zoning and building ordinances, a tax established by resolution of the Mayor and Commissioners of Henlopen Acres shall become due and payable to the Mayor and Commissioners of Henlopen Acres ("Town"), as set forth in this article.
For the purpose of this article, the following words and phrases have the following respective meanings unless the context clearly indicates a different meaning:
- GROSS RENTAL RECEIPTS
- The consideration received for occupancy valued in money, whether received in money or otherwise, including all receipts, cash and property or services of any kind or nature and also any amount for which the occupant is liable for occupancy without any deduction therefrom whatsoever.
- An individual, copartnership, corporation, company, association, firm or any group of individuals acting as a unit and includes any trustee, receiver, assignee or personal representative thereof.
Every person receiving any payment for rentals set forth in § 108-15 above on which the tax is levied under this article shall be obligated to pay the Town the tax provided for in the article. Said person may collect such sum from the party paying the rental when the rental payment is made, and, if the person collects such tax from the party paying the rental, such collections shall be held in trust until remitted as hereinafter required.
The tax on rental income received from January 1 to December 31 shall become due and payable on or before the following January 31. The person collecting the tax shall make out a report upon the prescribed form, sign the report and submit the report along with the remittance of the tax to the Town.
If any person fails or refuses to file the necessary report form and/or to remit to the Town the tax required to be collected and paid under this article, within the time and in the amount specified in this article, there shall be added to the tax interest at the rate of 1% per month or portion thereof on the unpaid tax beginning with the final due date until paid and if the tax remains delinquent and unpaid for a period of one month from the date it is due and payable there shall be added thereto by the Town a penalty of 5% of the tax due. No license as required by Chapter 95, Rental Property, Article I, Rental Unit Licensing, will be issued until such taxes are paid.
The Town may proceed to collect delinquent and unpaid taxes by suit or other legal means.
The form required by § 108-18 shall be furnished by the Town Manager and may be amended from time to time as may be necessary.