CHAPTER 262

FORMERLY

HOUSE BILL NO. 729

AN ACT TO AMEND CHAPTER 54, TITLE 30 OF THE DELAWARE CODE RELATING TO THE REALTY TRANSFER TAX.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (three-fifths of all members elected to each House thereof concurring therein):

Section 1. Amend §5401, Chapter 54, Title 30 of the Delaware Code by adding thereto a new subsection (8) to read as follows:

"(8) Notwithstanding subsection (1) of this section, there shall be included In the definition of 'document' for purposes of this chapter 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. No jurisdiction in this State shall issue a building permit 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 Director of Revenue, including at his discretion, 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 being 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 subsection. In addition, no jurisdiction in this State shall issue a certificate of occupancy relative to any building on which a tax is provided by this subsection unless and until the owner recertifies the actual cost of the building and pays any additional tax due as a result of such recertification. 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 501. of the value of the property transferred. A 'transfer' for purposes of this subsection shall include any transfer made by a 'document' as described in this section, other than this subsection, and shall not include any transaction excluded from the definition of 'document' under the provisions of paragraphs a. through t. of subsection (1) of this section.".

Section 2. Amend §5402, Chapter 54, Title 30 of the Delaware Code by adding to said Section a new subsection (f) to read as follows:

"(f) Notwithstanding subsection (a) of this section, the rate of tax on documents described in §5401(8) of this Chapter shall be IX on amounts exceeding 510,000, which shall be borne by the owner of the building whose construction is made subject to tax under §5401(8)."

Section 3. This Act shall be effective for all contracts entered into after September 1, 1990, for which building permits or certificates of occupancy are sought after said date.

Approved July 2, 1990.