Bill would give tax break to first-time homebuyersApr 18th, 2018 · by Matt Bittle · Comments: 1
DOVER — Lawmakers on Tuesday introduced a bill to exempt first-time homebuyers from an increase in the realty transfer tax enacted last summer.
To balance the budget, the General Assembly bumped the tax on home sales from 3 to 4 percent in July, against protests from realtors and some legislators.
That tax is split unevenly between the state and counties, with the state getting 2.5 percent and the county where the sale takes place receiving 1.5 percent.
The seller and the buyer each pay half the tax.
House Bill 380 would exempt individuals who have never owned a home before — in any state, not just in Delaware — from paying their share of the additional tax for the first $400,000 on a building purchase.
Essentially, a first-time homebuyer would receive a credit of up to $2,000.
“The real estate community got hit hard with that bill, and this is an attempt to make it a little bit easier, give them something that they can entice people to come and buy homes,” main sponsor House Speaker Pete Schwartzkopf, D-Rehoboth Beach, said.
The measure would be retroactive to August 1, meaning any qualified individual who bought a house since then could receive a refund through the Division of Revenue.
It would cost the state government approximately $3.5 million in the first fiscal year and $4.5 million in the second.
The bill has bipartisan support.
All three counties currently have programs offering tax breaks to first-time buyers as part of an effort to encourage homeownership.
Kent exempts both the seller and buyer from its share of the tax, while Sussex and New Castle require the seller, but not the buyer, to pay the .75 percent fee.
All parties must still pay their half of the 2.5 percent that goes to the state.
“The dream of homeownership is a cornerstone of the middle class, a key to social mobility, and the bedrock of safe, stable communities,” Senate President Pro Tempore David McBride, D-New Castle, said in a statement.
“We should be doing everything we can to bring that dream within reach for first-time buyers, including modifications to the realty transfer tax.”
The House unanimously passed legislation giving judges greater discretion in cases of juveniles illegally carrying a gun.
House Bill 306 now goes to the Senate.
Current state law requires anyone over age 15 to be tried as an adult for possession of a firearm during commission of a felony, itself a felony carrying a sentence of up to 25 years.
The bill would not just raise the minimum age one year but would also allow judges to send cases where a gun was possessed but not used during the commission of a felony to Family Court as opposed to Superior Court.
“If a youth was using the weapon as part of the offense, then it would remain in Superior Court, but if you just happened to have the weapon on another count, like just caught with drugs or something like that, they would have the option of leaving it in Family Court,” Rep. J.J. Johnson, D-New Castle, said after the vote.
Rep. Johnson attempted to make the change as part of a bill dealing with several other juvenile offenses last year but was forced to amend it out.
The version passed Tuesday was approved only after he introduced an amendment as part of a compromise with the Department of Justice.
The original form of House Bill 306 simply stated that anyone charged with possession of a firearm during the commission of a felony could be tried as an adult at age 16 or older, containing no provision mandating a teen be tried as an adult if he or she fired or displayed a gun during a felony.
While it wasn’t his preferred option, Rep. Johnson said he was satisfied with the amendment.
Reach staff writer Matt Bittle at email@example.com