As used in this article, except where the context
clearly indicates a different meaning:
A. "Document" means any deed, instrument or writing whereby
any real estate within the unincorporated areas of Sussex County,
or any interest therein, shall be quit-claimed, granted, bargained,
sold or otherwise conveyed to the grantee, but shall not include the
following:
(2) Any lease other than those described or defined in Subsection
D below.
(4) Any conveyance between corporations operating housing projects pursuant to Chapter
45 of Title 31 of the Delaware Code 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 to a trustee, nominee or straw
party for the grantor as 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
chapter; or 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 his interest in or ownership of the real estate being conveyed; provided, however, that this Subsection
A(14) 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
A(14) 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 25 Del. C. § 7003, provided that tax on said conveyance
has been paid under 30 Del. C. § 3002.
[Amended 10-12-2010 by Ord. No. 2152]
(20)
Any conveyance without consideration to an organization
exempt from tax under § 501 (c)(3) of the Federal Internal
Revenue Code [25 U.S.C. § 501(c)(3)].
(21)
Any conveyance between siblings, half-siblings
or stepsiblings.
[Added 8-29-2000 by Ord. No. 1392]
(22)
Any conveyance to a nonprofit conservation organization
when the property is purchased for open space preservation purpose.
[Added 3-30-2004 by Ord. No. 1672]
(23)
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.
[Added 3-30-2004 by Ord. No. 1672]
B. "Transaction" means the making, executing, delivering,
accepting or presenting for recording of a document.
C. "Value" means, 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.
D. 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 (25 Del.
C. § 2201 et seq.).
(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 30 Del. C. § 2301(a)(88), relating to commercial
lessors.
E. In determining the term of a lease under Subsection
D 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.
F. For purposes of Subsection
C, in the case of a document described in Subsection
D 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 Department of Finance within 30 days after the date such amounts become due and payable under the agreement.
G. Conveyance of interest.
(1) Except as provided in Subsection
G(1) and
(2), 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," as defined in Subsection
A of this section, and subject to the exemptions contained therein, except those exemptions contained in Subsection
A(10) and
(14) of this section.
(2) 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.
(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 this 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 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.
H. "First-time home buyer" means a natural person who,
individually or as a co-tenant, has at no time held any interest in
residential real estate, wherever located and which has been occupied
as their principal residence, and who intends to occupy the property
being conveyed as his or her principal residence within 90 days following
recordation.
I. Documents; issuance of building permits and certificates of occupancy;
building.
[Added 12-2-2008 by Ord. No. 2007]
(1) Notwithstanding the foregoing provisions of this section, there shall
be included in the definition of "document" for the purposes of this
article any contract or other agreement or undertaking for the construction
of all or a part of a building, all or a portion of which contract,
agreement or undertaking (or any amendment to the foregoing) is entered
into, where 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 of the land to the
grantee.
(2) The County shall not issue a building permit for any such building
unless and until the person or persons (including corporations, other
associations or entities) requesting such permit shall demonstrate
in whatever form may be specified and required by the County Director
of Finance, including at the Director's discretion, a form of affidavit
certifying that:
(a)
No transfer as described in this section has occurred within
the preceding year; or
(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 land was transferred; or
(c)
The required amount of the County realty transfer tax on the
document, as defined in this article, has been paid.
(3) In addition, the County shall not issue a certificate of occupancy
relative to any building on which the transfer taxes provided or required
to be paid by this article unless and until the owner recertifies
the actual cost of the building and improvements to the real estate
and pays any additional tax due thereon as a result of such recertification.
(4) "A building" for the purposes of this article shall mean any structure
having a roof supported by columns or walls which structure is intended
for supporting or sheltering any use or occupancy and 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
land transferred.
Where there is a transfer of a residential property
by a licensed real estate broker, which property was transferred to
him 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 him shall be given to
him 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 paid from the proceeds of any judicial sale of real estate as part of the costs of such sale and of the writ upon which the sale is made before any such proceeds are applied toward any obligation, claim, lien, judgment or estate, unless such transfer is exempt pursuant to the provisions of §
103-18A(16) herein.
The payment of the tax imposed by this article
shall be evidenced by a notation of payment on the document. The collector
shall note on the document the payment of the tax, the amount of payment,
the date of payment and the initials of the person receiving payment
and his office. Such notation shall be conclusive evidence of payment
as to any subsequent purchaser relying thereon.
The Recorder of Deeds in and for Sussex County
shall be the collector of the tax imposed by this article. The Recorder
of Deeds shall be provided with an official stamp to be used to indicate
on the document the tax paid.
No document 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 document, 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 the true, full and
complete value thereof or shall be accompanied by an affidavit executed
by a responsible person connected with a 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.
[Amended 7-1-1998 by Ord. No. 1247]
Funds realized by Sussex County pursuant to
this article shall be segregated from the county's general fund, and
the funds and all interest thereon shall be expended solely 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 7-1-1998 by Ord. No. 1247; amended 6-13-2017 by Ord. No. 2501]
Any incorporated municipality within Sussex County which does
not collect a realty transfer tax or which collects a realty transfer
tax but which, during its fiscal year, receives less than $20,000
in revenue from its realty transfer tax shall receive a distribution
from the County from the County's realty transfer tax receipts. The
County distribution to any qualifying municipality shall be equal
to the difference between the total realty transfer tax revenue collected
by the municipality during any given fiscal year and $20,000, provided
that the City of Milford shall receive a fixed distribution of $10,000.
Each qualifying municipality shall submit written verification to
the County, in a form acceptable to the County, of realty transfer
tax revenue no later than 60 days from the end of its fiscal year.
Use of such distribution shall be limited to those uses of realty
transfer tax revenue as provided in Title 22 of the Delaware Code.