Closing Costs in Delaware 2026: Buyer & Seller Guide

Delaware taxes the deed, not the mortgage. The state realty transfer tax is 3% of value, cut to 2.5% where the town or county levies the full 1.5% local tax, for 4% combined (30 Del. C. § 5402(a)). The Ardens, with no local tax, pay 3%. A Delaware-licensed attorney must conduct the closing.

2.5% to the state, 1.5% to the town or county

Title 30, section 5402(a) sets the state rate at 3 percent “unless the municipality or county where the property is located has enacted the full 1½ percent realty transfer tax,” in which case the state takes 2½ percent. The local tax comes from two separate grants of power. Towns get it from 22 Del. C. § 1601. Counties get it from 9 Del. C. § 8102, which reaches only “the unincorporated areas of the county.” Both cap the local levy at 1½ percent. So a house inside Newark or Dover pays the town’s tax, not the county’s.

The three county Recorders of Deeds publish the rates they collect:

The tax is charged on “value,” which section 5401(4) defines as the actual consideration “including liens or other encumbrances thereon.” If the price is below the highest assessed value for local property tax, the tax runs on that assessed value unless the parties show fair market value is lower; then it runs on fair market value or the price, whichever is greater. Showing the sale was at arm’s length between unrelated parties is enough to prove fair market value. The current state rates took effect August 1, 2017 (81 Del. Laws c. 56), and they do not apply to contracts signed before that date.

Who owes it: the Code says two things, so put it in the contract

Section 5402(a) says the state tax “is to be apportioned equally between grantor and grantee.” Section 5412, older than the equal-split sentence, says that as between the parties and “in the absence of an agreement to the contrary,” the burden falls on the grantor. The Code does not say which of the two rules controls when a contract is silent, and the Division of Revenue’s return simply asks the parties to enter each side’s percentage. Write the split into the agreement of sale. The county or town share is paid “by the transferor or transferee as determined by” that government. Sussex County’s code splits its share equally unless the parties agree otherwise (§ 103-19A, as recited in Ordinance 2500).

Worked example, a $400,000 house in unincorporated Sussex County split evenly: the state tax is $10,000 and the county tax is $6,000, so buyer and seller each pay $8,000.

The first-time buyer cut: up to $2,000 off the state share

For transactions on or after August 1, 2017, section 5402(c) reduces the buyer’s share of the state tax by ½ percent times the lesser of the value or $400,000. It does not touch the seller’s share. To qualify, you must never have held “any direct legal interest in residential real estate, wherever located,” and must intend to occupy the home as your principal residence within 90 days of the transaction, or within 90 days of the certificate of occupancy if a residence is being built (§ 5401(2)). Spouses or co-buyers qualify only if none of them has held such an interest.

Counties must also exempt first-time buyers from the county tax “up to at least the value of the property or $400,000 whichever is less” (9 Del. C. § 8102(a)). New Castle County’s Recorder lists a 0.75% county rate on first-time buyer deeds, half the normal 1.5%. Kent County marks its tax “Exempt” for first-time buyers. Sussex County exempts only the buyer’s half, and only when every buyer qualifies; the parties may not rewrite the split to cut the seller’s half (Ordinance 2500, effective July 1, 2017). In the Sussex example above, a qualifying buyer would owe $3,000 of state tax and no county tax.

Towns set their own first-time buyer rules. The Sussex Recorder lists Georgetown, Greenwood, Laurel and Seaford as collecting only the “seller’s portion” of 0.75% on first-time buyer deeds, and Ellendale and Milford as “Exempt.”

Deeds the tax does not reach

Section 5401(1) takes these out of the definition of a taxable “document”:

• any mortgage;
• conveyances between spouses, and between former spouses after the final divorce decree for property acquired before it;
• between parent and child or the child’s spouse, between grandparent and grandchild or the grandchild’s spouse, and between siblings, half siblings or step siblings;
• a deed to a lender holding a mortgage “genuinely in default,” by sheriff’s sale or in lieu of foreclosure;
• an old home traded to a builder as part of the price of a new, never-occupied one.

Building on land you just bought is different. A contract to build is itself taxed at 2% “on amounts exceeding $10,000,” borne by the building’s owner, when it is entered into, or labor or materials are supplied, before the land transfer or within one year after it (§§ 5401(9), 5402(f)). Manufacturing buildings and publicly funded affordable housing construction are carved out.

A Delaware lawyer has to run the closing

On May 31, 2000, the Delaware Supreme Court approved a decision of the Board on the Unauthorized Practice of Law in In re Mid-Atlantic Settlement Services, Inc. (No. 102, 2000). The rulings the Court affirmed: “an attorney licensed to practice law in Delaware is required to conduct a closing of a sale of Delaware real property,” and likewise “a closing of a refinancing loan secured by Delaware real property.” A Delaware attorney’s participation is also necessary in “representing the buyer in examining the title and removing exceptions to the title, supervising the disbursement of funds,” and explaining the legal effect of the documents. The only carve-out named is a home equity loan where the lender acts pro se and no title exceptions need evaluating.

Recorder of Deeds fees, and a filing for out-of-state sellers

Each county sets its recording fees by ordinance (9 Del. C. §§ 9617, 9619). State law requires a $5 Housing Development Fund surcharge and a $25 Delaware Cultural Access Fund fee on every recorded document, collected as part of the county’s charge (§ 9607(b)). Sussex County’s schedule, effective July 1, 2024, charges deeds and mortgages a $30 document surcharge, a $1 maintenance fee and $9 per page.

Delaware has no state mortgage tax. The transfer tax excludes “any mortgage” (§ 5401(1)c), and no chapter of Title 30, the state tax title, taxes one.

A seller who is not a Delaware resident files an estimated income tax return with the Recorder, and the return and the tax go in with the deed before it is recorded. The tax is figured at the highest marginal rate under 30 Del. C. § 1102, on the estimated gain or, on an alternative form, on the amount realized minus the balance due on recorded liens. It is “withheld from the net proceeds of the sale” (§ 1126). Another form declares the gain exempt or excluded instead.

Title insurance: each company’s rates on file with the Commissioner

Title insurance falls under Delaware’s rate chapter (18 Del. C. § 2502(a)(5)). Each insurer files its rates and rating rules with the Insurance Commissioner, directly or through a licensed rating organization; rates “shall not be excessive, inadequate or unfairly discriminatory” (§§ 2503(a)(2), 2504(a), 2510). A filing goes in at least 60 days before its effective date and is deemed to meet the law after 60 days unless, within 45 days, the Commissioner disapproves it or extends review (§ 2506(c)). A policy must be issued at the filed rates (§ 2517).

DSHA second mortgages for down payment and closing costs

Alongside its Smart Start first mortgage, the Delaware State Housing Authority offers zero-interest second mortgages for down payment and closing costs. None has a monthly payment, and each is repaid on refinance, sale, transfer of title, or when the home stops being your primary residence. As the program page read on September 24, 2026:

• First State Home Loan: 3% of the first mortgage amount, under both Welcome Home (first-time buyers) and Open Door (first-time and repeat buyers).
• Keys4You Home Loan: 4%, under both tracks.
• Take5 Home Loan: 5%, Welcome Home only.
• Diamond in the Rough Home Loan: 5%, Welcome Home only, for buyers who qualify for the FHA 203(k) limited program.

Both tracks require a 620 minimum credit score, with housing counseling at 659 or below. Welcome Home income limits are $122,700 (1-2 persons) and $141,105 (3 or more) in New Castle County, and $111,400 and $128,110 in Kent and Sussex. The single-family purchase price cap is $659,385 in New Castle and $566,354 in Kent and Sussex. Homes in DSHA’s listed targeted census tracts get higher limits. Start with mortgage pre-approval through a DSHA participating lender, then size the cash you need with the down payment calculator and what you can afford.

More Delaware tools and nearby states

• Closing costs by state
• Delaware real estate guide
• Homeowner insurance guide for Delaware
• Mortgage calculator
• Refinance guide
• Closing Costs in Maryland 2026
• Closing Costs in New Jersey 2026
• Closing Costs in Virginia 2026

Delaware closing questions

Why does a house in Arden pay 3% and not 4%?

Arden, Ardentown and Ardencroft have no local transfer tax, so only the 3% state rate applies. The state drops to 2.5% only where a town or county has enacted the full 1.5% (§ 5402(a)).

If the contract says nothing, who pays the transfer tax?

The Code does not give one clear answer. Section 5402(a) apportions the state tax equally between seller and buyer; section 5412, enacted earlier, says the seller bears it “in the absence of an agreement to the contrary.” Don’t leave it silent: state the split in the agreement of sale.

I sold a condo five years ago. Do I get the first-time buyer cut?

No. The definition excludes anyone who has ever held a direct legal interest in residential real estate, wherever located.

I live in Pennsylvania and am selling my Delaware beach house. What happens at closing?

Estimated Delaware income tax is withheld from your net proceeds and handed to the Recorder with the deed, unless you file the form declaring the gain exempt or excluded (30 Del. C. § 1126). If the sale leaves no net proceeds, the Recorder may take the form without payment once the closing attorney confirms no funds went to you.