AN ACT TO IMPOSE A REALTY TRANSFER TAX.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Title 30, Delaware Code, is amended by adding thereto a new chapter to read:
CHAPTER 54. REALTY TRANSFER TAX
§ 5401. Definitions
As used in this chapter except where the context clearly indicates a different meaning—
"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, but does not include wills, mortgages, transfers between corporations operating housing projects pursuant to the Housing and Redevelopment Assistance Law and the shareholders thereof, transfers between non-profit industrial development agencies and industrial corporations purchasing from them, any transfers to nonprofit industrial development agencies, and transfers between husband and wife, transfers between persons who were previously husband and wife but who have since been divorced provided such transfer is made within 3 months of the date of the granting of the final decree in divorce, and the property or interest therein subject to such transfer was acquired by the husband and wife or husband or wife prior to the granting of the final decree in divorce, transfers between parent and child or the spouse of such a child or between parent and trustee for the benefit of a child or the spouse of such child, by and between a principal and straw party for the purpose of placing a mortgage or ground rent upon the premises, correctional deeds without consideration, transfers to or from the United States, this State or to any of their instrumentalities, agencies or political subdivisions, leases, a conveyance to a trustee under a recorded trust agreement for the express purpose of holding title in trust as security for a debt contracted at the time of the conveyance under which the trustee is not the lender and requiring the trustee to make reconveyance to the grantor-borrower upon the repayment of the debt, or a transfer by the owner of previously occupied residential premises to a builder of new residential premises when such previously occupied residential premises is taken in trade by such builder as part of the consideration from the purchaser of a new previously unoccupied residential premises any transfer from a purchase money mortgagor to the vendor holding the purchase money mortgage whether pursuant to a foreclosure or in lieu thereof, or any transfer between religious organizations or other bodies or person holding a title to real estate for a religious organization if such real estate is not being or has not been used by such transferor for commercial purposes.
"Transaction". The making, executing, delivering, accepting, or presenting for recording of a document.
"Value". In the case of any document granting, bargaining, selling, or otherwise conveying any real estate or interest therein, the amount of the actual consideration therefor, 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, 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.
§ 5402. Rate of tax; when payable; exception
(a) Every person who makes, executes, delivers, accepts or presents for recording any document or in whose behalf any document 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 percent of the value of the property represented by such document, which tax shall be payable at the time of making, execution, delivery, acceptance or presenting for recording of such document.
(b) No tax shall be imposed on conveyances when the actual value of the property being transferred is less than $100.
§ 5403. Transfer by broker
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.
§ 5404. Payment from proceeds of judicial 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.
§ 5405. Documentary stamps; affixing; cancellation; other methods
(a) The payment of the tax imposed by this chapter shall be evidenced by the affixing of a documentary stamp or stamps to every document by the person making, executing, delivering or presenting for recording such document. 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 write or stamp or cause to be written or stamped thereon the initials of his name and the date upon which such stamps are affixed or used so that such stamps may not again be used: Provided, That the Tax Department may prescribe such other method of cancellation as it may deem expedient.
(b) The Tax Department 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.
§ 5406. Furnishing stamps; sale; agents; compensation; bond premiums
(a) The Tax Department 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 chapter. The Tax Department shall make provisions for the sale of such stamps in such places as it may deem necessary.
() The Tax Department may appoint the recorder of deeds in each county and other persons within or without the state, as agents, for the sale of stamps to be used in paying the tax herein imposed upon documents, and may allow a commission to said agents of one per cent of the face value of the stamps.
(a) The Tax Department shall pay the premium on any bond required by the Tax Department to be procured by any agent for the performance of his duties under this chapter.
§ 5407. Enforcement; rules and regulations
The Tax Department shall enforce the provisions of this chapter and may adopt and enforce rules and regulations relating to:
(1) The method and means to be used in affixing or cancelling of stamps in substitution for or in addition to the method and means provided in this chapter.
(2) The denominations and sale of stamps.
(3) Any other matter or thing pertaining to the administration and enforcement of the provisions of this chapter.
§ 5408. Failure to affix stamps
No document upon which tax is imposed by this chapter shall be recorded in the office of any recorder of deeds of any county of this State unless proof of the payment of the realty transfer tax appears on the document as is provided in this chapter.
§ 5409. Value to be stated in document or affidavit; penalty for recording without documentary stamp
Every document when lodged with or presented to any recorder of deeds in this State for recording, 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 chapter.
§ 5410. Unlawful acts; penalty
(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; or,
(2) Make use of any documentary stamp to denote payment of the realty transfer tax without cancelling such stamp as required by this chapter or as prescribed by the Tax Department; or,
(3) Fail, neglect or refuse to comply with or violate the rules and regulations prescribed, adopted and promulgated by the Tax Department under the provisions of this chapter; or,
(4) Fraudulently cut, tear or remove from a document any documentary stamp or other evidence of payment of the realty transfer tax; or,
(5) Fraudulently affix to any document upon which tax is imposed by this chapter 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 chapter, 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; or,
(0) Wilfully 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; or,
(1) 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 act: Provided, That the possession of such stamps shall be prima facie evidence of an intent to violate the provisions of this clause; or,
(0) Knowingly or wilfully prepare, keep, sell, offer for sale, or have in his possession, any forged or counterfeited documentary stamps; or,
(0) 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 chapter as is indicated in such document or accompanying affidavit.
(b) Whoever violates any of the provisions of this section shall be fined not more than $500 and imprisoned for not more than 1 year or both.
(c) The Superior Court shall have jurisdiction over offenses under this section.
§ 5411. Failure to pay tax; determination; redetermination; review
(a) If any person shall fail to pay any realty transfer tax for which he is liable, the Tax Department may make a determination of additional tax and interest due by such person based upon any information within its possession or that shall come into its possession. All of such determinations shall be made so that notice thereof shall reach the parties against whom made within 3 years after the date of the recording of the document.
(b) Promptly after the date of such determination, the Tax Department shall send, by registered mail, a copy thereof to the person against whom it was made. Within 90 days after the date upon which the copy of any such determination was mailed, such person may file with the Tax Department a petition for redetermination of such taxes. Every petition for redetermination shall state specifically the reasons which the petitioner believes entitle him to such redetermination, and it shall be supported by affirmation that it is not made for the purpose of delay and that the facts set forth therein are true. It shall be the duty of the Department within 6 months after the date of any determination to dispose of any petition for redetermination. Notice of the action taken upon any petition for redetermination shall be given to the petitioner promptly after the date of redetermination by the Department.
() Any person shall have the right to review by the Tax Board and appeal to the Superior Court in the same manner and within the same time as provided by law in the case of other tax appeals.
§ 5412. Dispute between parties
As between the parties to any transaction which is subject to the realty transfer tax imposed by this chapter, in the absence of an agreement to the contrary, the burden for paying the tax shall be on the grantor.
Section 2. The provisions of this act shall become effective on the first day of the second month after this act becomes law.
Approved June 9, 1965.