[Adopted 10-1-1990 as Ord. No. N-2]
A.
DOCUMENT
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(a)
(b)
(c)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
TAX COLLECTOR
TRANSFER
VALUE
As used in this Article, the following terms shall
have the meanings indicated:
Deed, instrument or writing whereby any land, tenements or
hereditaments, or any interest therein, situated within the corporate
limits of Middletown, Delaware, shall be granted, bargained, sold
or otherwise conveyed to the grantee, purchaser or any other person,
which shall be presented for recording in New Castle County, not including:
Wills.
Mortgages.
Transfer between nonprofit industrial development
agencies and industrial corporations purchasing from them.
Any transfer to nonprofit industrial development
agencies.
Leases.
Transfers 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 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.
Correctional deeds without consideration.
A conveyance to a trustee under a recorded trust
agreement for the express purpose of holding title in trust as a 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.
Any transfer from a purchase money mortgagor
to the lender holding the purchase money mortgage whether pursuant
to a foreclosure or in lieu thereof.
Transfers by or to the Town of Middletown, state
or federal government or instrumentalities, agencies or political
subdivisions thereof.
Transfers between parent or child or the spouse
of such a child.
Transfers:
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 transfer pursuant to this Article; or
From a trustee, nominee or straw party to the
beneficial owner.
Transfers between a parent corporation and a
wholly owned subsidiary corporation, provided that such transfer is
without actual consideration.
Transfer 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 transferred; provided, however, that this
subsection shall not apply to any distribution in liquidation or other
transfer 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 shall not apply to any transfer from a partnership
to its partners unless the partners' interest in the partnership has
been held for more than three years.
Transfers 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 § 154-11 of this Article shall be exempt.
Transfers 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 § 154-11 of this Article shall be exempt.
Transfers 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 of a mobile home as defined in
25 Del. C. § 7003, provided that the tax on said conveyance
has been paid under 30 Del. C. § 3002.
Any conveyance without consideration to an organization
exempt from tax under § 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.
[Amended 9-8-1998]
The Tax Collector of the town or any person duly authorized
and appointed by him to serve as his agent for the purpose of carrying
out the provisions of this Article.
The making, executing, delivering, accepting or presenting
for recording of any document whereby title to or any interest in
real property located within the corporate limits of the Town of Middletown,
Delaware, is transferred or conveyed, regardless of where the document
is executed, delivered or accepted.
In the case of any document granting, bargaining, selling
or otherwise conveying any land, tenement or hereditaments, or interest
therein, the amount of the actual consideration therefor, including
liens or other encumbrances thereon and ground rent, or a commensurate
part of the liens or other encumbrances thereon and ground rent, where
such liens or other encumbrances and ground rent also encumber other
lands, tenements or hereditaments. Where such document shall not set
forth the real or bona fide consideration therefor 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 estimated full value of such
lands, tenements or hereditaments for local tax purposes as determined
by the Tax Collector of Middletown.
B.
The term "document" defined in Subsection A of this section shall include the following:
(1)
Any writing purporting to transfer a title 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.
(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 Town of Middletown, state or federal governments
or instrumentalities, agencies or political subdivisions 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.
C.
In determining the term of a lease under Subsection B 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.
D.
For purposes of Subsection A, definition of "value" of this section, in the case of a document described in Subsection B above 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 chapter, that the tax imposed by this Article shall be due and payable to the Tax Collector of the Town of Middletown within 30 days after the date such amounts become due and payable under the agreement.
E.
Beneficial ownership.
(1)
Except as provided in Subsection E(2) and (3) of this section, 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 section 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 Subsections (13) and (14) in the definition of "document."
(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 section.
(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 section. Where the beneficial owners of real property
prior to the conveyance or series of conveyances referred to in this
section 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 section, unless, under regulations promulgated
by the Council of the Town of Middletown, 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.
A.
Every person who makes, executes, delivers, accepts or presents for recording any document, except as defined or described in § 154-10 of this Article, 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 2% 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 of such document for recording. Said tax is to be apportioned equally between grantor and grantee.
[Amended 9-8-1998]
B.
No tax shall be imposed on conveyances when the actual
value of the property being transferred is less than $100.
A.
The payment of the tax imposed by this Article shall
be evidenced by the affixing of a documentary stamp or stamps to every
document by the person making, executing, delivering or presenting
such document for recording. 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, 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 Council
may prescribe such other method or cancellation as it may deem expedient.
B.
The Council may by ordinance 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.
In addition to the Tax Collector's other duties,
the Tax Collector:
A.
Shall make provisions for the sale of stamps in such
places as he or she may deem necessary.
B.
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.
C.
Is charged with the enforcement of this Article and
is authorized and empowered to prescribe, adopt, promulgate and enforce
regulations relating to:
A.
No document upon which tax is imposed by this Article shall be recorded in the office of any recorder of deeds of any county in this state unless proof of the payment of the realty transfer tax appears on the document as is provided in § 154-12 of this Article.
B.
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 and the
reason, if any, why such document is not subject to tax under this
Article; provided that in the case of a transaction exempt from tax
the affidavit shall be made by the grantee.
As between the parties to any transaction which
is subject to the realty transfer tax imposed by this Article, in
the absence of an agreement to the contrary, the burden for paying
the tax shall be on the grantor.
It shall be unlawful for any person to:
A.
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;
B.
Make use of any documentary stamp to denote payment of the realty transfer tax without canceling such stamp as required by § 154-12 of this Article or as prescribed by the Council;
C.
Fail, neglect or refuse to comply with or violate
the rules and regulations prescribed, adopted and promulgated by the
Council under the provisions of this Article;
D.
Fraudulently cut, tear or remove from a document any
documentary stamp or other evidence of payment of the realty transfer
tax;
E.
Fraudulently affix to any document upon which tax
is imposed by this Article 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 Article, 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;
F.
Willfully 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;
G.
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 Article, provided that the possession of such
stamps shall be prima facie evidence of an intent to violate the provisions
of this subsection;
H.
Knowingly or willfully prepare, keep, sell, offer
for sale or have in his possession any forged or counterfeited documentary
stamps; or
I.
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 Article and as is indicated
in such document or accompanying affidavit.
[Amended 9-8-1998]
Any person guilty of conduct prohibited in § 154-16 shall, upon conviction, be punished with a fine of not more than $500 or by imprisonment not to exceed one year, or both fine and imprisonment in the discretion of the court. The Court of Common Pleas for New Castle County shall have concurrent jurisdiction with justices of the peace and the appropriate court of the town to try offenses under this Article.
A.
If any person shall fail to pay any realty transfer
tax for which he is liable, the Tax Collector may make a determination
of additional tax and interest due by such person, based upon any
information within his possession or that shall come into his possession.
All of such determinations shall be made so that notice thereof shall
reach the parties against whom made within three years after the date
of the recording of the document.
B.
Promptly after the date of such determination, the
Tax Collector 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 Collector a petition for redetermination of such
taxes. Every petition for redetermination shall state specifically
the reasons which the petitioner believes entitled 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 Tax Collector within six 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 Finance Director.
C.
Any person shall have the right to appeal to the Court
of Common Pleas for New Castle County in the same manner and within
the same time as provided by law in the case of other tax appeals.
D.
Interest added to any determination of additional
tax shall be computed at the rate of 1% per month or fraction thereof
from the date the realty transfer tax should have been paid to the
date paid.
