[Adopted 5-10-1995 by Ord. No. 95-08]
[Amended 7-14-1998 by Ord. No. 98-16[1]]
A tax of 1.5% upon the transfer of real property
situated within unincorporated areas of Kent County shall be imposed
and collected, but said tax shall not exceed 1.5% of the value of
the real property transferred.
[1]
Editor's Note: This ordinance changed 1% to 1.5% throughout this article. Section 3 of this ordinance provided as follows: "The provisions of this ordinance shall become effective only upon the enactment into law of legislation amending the provisions of Chapter 81, Title 9 and Chapter 54, Title 30 of the Delaware Code which (a) reduces the State of Delaware realty transfer tax from 2% to 1.5% and (b) authorizes County and municipal governments to increase their respective realty transfer tax limits from 1% to 1.5%."
As used in this article, except where the context
clearly indicates a different meaning, the following terms shall have
the meanings indicated:
Any deed, instrument or writing whereby any
real estate within the unincorporated areas of Kent County, or any
interest therein, shall be quitclaimed, granted, bargained, sold or
otherwise conveyed to the grantee, but shall not include the following:
Any will.
Any lease other than those described or defined in Subsection A(4) below.
Any mortgage.
Any conveyance between corporations operating
housing projects pursuant to Chapter 45 of Title 31 of the Delaware
Code and the shareholders thereof.
Any conveyance between nonprofit industrial
development agencies and industrial corporations purchasing from them.
Any conveyance to nonprofit industrial development
agencies.
Any conveyance 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.
Any conveyance between parent and child or the
spouse of such a child.
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 article; or
From a trustee, nominee or straw party to the
beneficial owner.
Any conveyance between a parent corporation
and a wholly owned subsidiary corporation, provided that such conveyance
is without actual consideration.
Correctional deeds without actual consideration.
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.
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 shall not apply to any distribution in 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 conveyance
from a partnership to its partners unless the partners' interest in
the partnership has been held for more than three years.
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.
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.
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.
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.
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 Subsection 501(c)(3) of the Federal Internal
Revenue Code [25 U.S.C. § 501(c)(3)].
Any conveyance of land which, at the time of
transfer, is being valued, assessed and taxed by Kent County pursuant
to 9 Del. C. §§ 8330 to 8337 and which the purchaser
intends to use for agricultural, horticultural or forest use, as those
terms are defined in 9 Del. C. §§ 8330 to 8332, for
as long as he owns the property, but if the property is put to any
other use within three years of sale, then the otherwise exempted
transfer tax will immediately come due and be payable by the then
current owner.
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 9-26-2000 by Ord. No. 00-22][1]
Any conveyance between siblings, half-siblings
or step-siblings.
[Added 9-26-2000 by Ord. No. 00-22[2]]
The term "document" defined in Subsection A of this definition shall include the following:
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.).
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.
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.
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.
A natural person who has at no time held any interest in
residential real estate, wherever located, and which has been occupied
as his principal residence, and who intends to occupy the property
being conveyed as his or her principal residence within 90 days following
recordation.
The making, executing, delivering, accepting or presenting
for recording of a document.
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 land, tenements
or hereditaments for local tax purposes.
For purposes of this definition, in the case of a document described in Subsection B of the definition of "document" 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.
A.
Except as provided in Subsections B and C 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 chapter as if such property were conveyed through a duly recorded document as defined in § 191-22 of this article and subject to the exemptions contained therein, except those exemptions contained in Subsection A(10) and (14) of the definition of "document."
B.
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 article.
C.
Where the beneficial owners of real property prior
to the conveyance or series of conveyances referred to in this article
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 article 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.
A.
Every person who makes, executes, delivers, accepts or presents for recording any document, except as defined or described in Subsection B of the definition of "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 1.5% 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. In the absence of any agreement to the contrary, the burden for paying the tax shall be apportioned equally between the grantor and the grantee.
[Amended 7-14-1998 by Ord. No. 98-16]
B.
No tax shall be imposed on conveyances when the actual
value of the property being transferred is less than $100.
C.
Every person who makes, executes, delivers, accepts or presents for recording any document defined or described in Subsection B of the definition of "document" or in whose behalf any such document is made, executed, delivered, accepted or presented for recording shall be subject to pay for and in respect to the transaction, or in any part thereof, a realty transfer tax at the rate of 1.5% of the value of the property represented by such document, which tax shall be payable as follows:
[Amended 7-14-1998 by Ord. No. 98-16]
(1)
The tax on the consideration attributed to the first
year of the term shall be payable at the time of making, execution,
delivery, acceptance or presenting of such document for recording.
(2)
The tax on the consideration attributed to each successive
year of the term thereafter shall be paid annually to the Department
of Finance.
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
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 Subsection A(16) of the definition of "document" in § 191-22.
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 Kent 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 Kent 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 Kent 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.
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.
(2)
Fraudulently affix to any document upon which tax
is imposed by this article any evidence of payment of the realty transfer
tax when the full amount of tax thereon has not been duly paid.
B.
Any person who violates this section shall be deemed
to be guilty of a misdemeanor and, upon conviction in a court of competent
jurisdiction, shall be fined not more then $500 and imprisoned for
not more than one year, or both, and in addition shall be required
to pay to Kent County any unpaid transfer tax.
A.
If any person shall fail to pay any realty transfer
tax imposed by this article for which he is liable, the Director of
Accounting may make a determination of additional tax and interest
due by such person, based upon information within his/her possession
or that shall come into his possession. Any such determination shall
be made so that notice thereof shall reach the party or parties against
whom it is made within three years after the recording of the document.
B.
Promptly after the date of such determination, the
Director of Accounting shall send, by registered mail, with return
receipt requested with postage prepaid, a copy thereof to the person
against whom it is made.
C.
Within 90 days after the date upon which the copy
of any such determination of additional tax was mailed, such person
may file with the Director of Accounting a petition for redetermination
of such tax. Every petition for redetermination shall state specifically
the reason or reasons which the petitioner believes entitle him to
such redetermination, and it shall be supported by affirmation that
it is not for the purpose of delay and that the facts set forth therein
are true and correct.
D.
It shall be the duty of the Director of Accounting,
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 Director of Accounting.
E.
Any person shall have the right to review by a court
of competent jurisdiction of any determination made by the Director
of Accounting pursuant to this section.
F.
Interest shall be added to any determination of additional
tax and shall be computed at the statutory rate from the date any
transfer tax shall have been paid to the date paid.
A.
Upon determination that any tax collected pursuant
to this article has been collected improperly, the Director of Accounting
shall refund to the taxpayer the sum so paid with interest from the
date of payment at the statutory rate.
B.
When the Director of Accounting disallows a claim
for refund in whole or in part, the disallowance shall become final
90 days from the date when notice of disallowance is mailed to the
taxpayer, unless within this period the taxpayer files a written protest
with the County Administrator in which he shall set forth the grounds
on which the protest is based. If a protest is filed, the County Administrator
shall reconsider the disallowance. Notice of the County Administrator's
determination shall be mailed to the taxpayer by registered or certified
mail. The action of the County Administrator on the taxpayer's protest
is final upon the expiration of 30 days from the date when he mails
notice of his action to the taxpayer, unless within this period he
seeks review of the County Administrator's determination.
[Amended 4-8-2008 by Ord. No. 08-10]
Funds realized by Kent 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, including, but not limited to, agricultural
land preservation; public works services; capital projects and improvements;
infrastructure projects and improvements and debt reduction.
This article is adopted pursuant to the powers
conferred upon the Levy Court of Kent County, Delaware, in the 9 Del.
C. § 8101.
