A new state law has tightened Delaware’s realty transfer tax which will limit the chance for entities to sell property while avoiding the government payment.
The new law adds limited liability companies and other entities to the list of those subject to paying the tax. It also includes “mergers and all other indirect exchanges” that result in the sale of real property.
Before the change, businesses could create entities and sell real estate without paying the tax, and developers used that option on multi-million dollar properties.
Lawmakers believe that they have lost out on several million dollars of potential revenues prior to the laws passage.