By Eric Berman, REALTOR® | The Eric Berman Team at Compass
 

TL;DR:

Delaware is genuinely inexpensive on almost everything — no state sales tax, property tax rates among the lowest in the country, and housing well below Long Island. The one exception is large and nobody mentions it. Delaware's realty transfer tax is among the highest in the nation, with combined state and local rates commonly reaching four percent of the sale price and typically split between buyer and seller. A New York buyer pays roughly two percent going in, and pays again coming out. Worth knowing before you buy, particularly on a short horizon.

Start With the Long Island Sale

At 150 to 250 miles this is a short move, which tempts people to overlap the transactions. It still rarely works.

Before touring anything, know what the current home nets — commission, New York State Transfer Tax at four dollars per thousand, attorney fees generally $1,500 to $3,500, preparation, and carrying costs. The full breakdown of what a Long Island sale costs covers each line.

A seller who establishes Delaware residency before the Long Island closing becomes a New York nonresident for that transaction, triggering Form IT-2663 — an estimated payment at closing of 8.82 percent of net gain. A prepayment rather than an additional tax, refundable where the real figure comes in lower, but it reduces the wire.

For a long-held home, the exclusion covers $250,000 single and $500,000 filing jointly, and improvement records reduce taxable gain substantially. The full treatment of how gain is calculated covers the mechanics.

The Transfer Tax Nobody Mentions

Delaware's reputation is as a low-tax state, and on almost everything that's accurate. The realty transfer tax is the exception, and it's a large one.

Combined state and local realty transfer tax in Delaware commonly reaches four percent of the sale price — among the highest in the country — and it is typically split between buyer and seller. That means a buyer generally pays around two percent at purchase, and the seller pays a comparable share.

Two consequences a Long Island buyer won't anticipate.

You pay on the way in. New York buyers don't pay a transfer tax on a residential purchase. Delaware buyers customarily do, and on a $600,000 home a two percent share is $12,000 — a closing cost with no New York equivalent.

You pay again on the way out. When you eventually sell, the seller's share applies. That matters most for anyone who may not stay long, and it's the same shape as the Washington and San Francisco transfer taxes flagged elsewhere in this series.

Rates vary by municipality, and reductions exist in defined circumstances — first-time buyer relief being the common one, which generally won't apply to a relocating homeowner. Confirm current rates for a specific address with a Delaware attorney.

This doesn't undo Delaware's cost advantage. It does mean the total picture is less lopsided than "low taxes" suggests, and a seller building a budget should count it.

Property Taxes Are Low and the Picture Is Moving

Delaware's effective property tax rates are among the lowest in the country. That part holds and it's a genuine advantage over Nassau County.

What's worth knowing is that the assessments underneath those rates have been unusually stale.

Delaware's counties operated for decades on very old valuations, and court-ordered reassessments have been working through the system. A county that reassesses to current values while adjusting rates produces a different bill for individual properties even where total revenue is constrained — some go up, some go down.

The practical instruction: pull the actual current tax bill on any specific property, ask the county whether it reflects a recent reassessment, and don't reason from a seller's historical figure.

Delaware also offers senior property tax relief and other credits in defined circumstances, administered locally with their own eligibility rules and application requirements. Worth asking the county about rather than assuming.

And no state sales tax — a real, everyday advantage that compounds quietly for a household buying furniture, appliances, and everything else a move requires.

Closings Will Feel Familiar

Here's the procedural good news, and the original understated it.

Delaware requires attorney involvement in residential real estate closings. Conducting a closing is treated as the practice of law there, which means a licensed Delaware attorney is part of the transaction rather than optional.

For a New York seller that's genuinely reassuring — considerably closer to what they know than the escrow and title-company states covered elsewhere in this series. The fuller picture of what the attorney handles on the New York side describes the role that carries over.

Two attorneys are needed rather than one, since licensing is state-specific. A New York attorney handling relocations can often refer.

Delaware also uses a statutory seller disclosure requiring the seller to disclose known material defects — closer to New York's approach than to Virginia's disclaimer, though the form and requirements differ. A buyer should still inspect thoroughly.

Where in Delaware Changes the Answer

Delaware is small and it isn't uniform, and the differences are practical rather than characterological.

The northern part of the state, around Wilmington and Newark, is closer to Philadelphia and carries employment access to that metro, with housing costs reflecting proximity.

The middle of the state has seen substantial new construction, much of it in association-governed developments with monthly or annual charges and covenants worth reading before offering.

The coastal south, around Lewes and Rehoboth Beach, is a distinct market — seasonal in character, with different price behavior and, importantly, flood and coastal insurance considerations. Zone designation, claim history that attaches to the address permanently, and elevation certificates all deserve the same scrutiny as waterfront anywhere. The full treatment of flood zone questions covers the NFIP mechanics, which are federal and identical.

Pull tax bills and insurance quotes on specific addresses rather than reasoning from a regional average.

One Thing Worth Asking a CPA

Delaware's treatment of retirement income is a genuine part of the financial case for households at that stage, and it's a question rather than a claim.

The state's treatment of Social Security and its pension exclusion for older taxpayers differ from New York's, with eligibility rules and thresholds set by statute and subject to change.

That's a CPA conversation, not a real estate one. But for a household weighing this move at or near retirement, it belongs in the arithmetic alongside housing cost and property tax — and it's frequently a larger number than either.

A Worked Example

Consider a composite case — a Nassau County household relocating to central Delaware, selling a colonial that comped near $1,050,000 and buying at roughly $600,000.

The transfer tax was the surprise. Their Delaware attorney explained that the buyer's share at closing would run into five figures — a cost line they had budgeted nothing for, because New York buyers don't pay one. It didn't change the decision; it changed the number they needed at closing.

The property tax picture was better than expected and less settled than they assumed. The bill on the home they liked reflected an assessment the county had recently revised, and the seller's historical figure was no longer the right reference.

They also priced flood insurance on a coastal property they'd considered before abandoning it for the central part of the state — the difference was material.

On the New York side they sold first, despite the drivable distance. Their attorney's early title review turned up a satisfied 2012 equity line never discharged, cleared in four weeks before listing.

Where to Start

Build the net-proceeds model on the Long Island home and sell first, even at this distance. Call the town or village building department about permits. Engage a New York real estate attorney early and talk to a CPA about IT-2663 and capital gains before setting a closing date.

On the Delaware side: ask a Delaware attorney what the combined realty transfer tax is for a specific municipality and what your share would be — both at purchase and at eventual sale. Pull the actual current property tax bill and ask whether it reflects a recent reassessment. Ask the county about senior or other credits if they might apply. Get flood insurance quotes on any coastal address. And ask a CPA about retirement income treatment if that's part of the picture.

Sellers wanting a current read on where their Long Island home sits can start with a quiet look at present value.

The Honest Bottom Line

Delaware is genuinely inexpensive, and for a Long Island household the move improves the financial picture in most respects. No sales tax, property tax rates among the lowest in the country, and housing well below Nassau County.

The exception is the transfer tax, and it's worth knowing precisely because everything else is cheap. A buyer pays a share of one of the country's highest transfer taxes going in, and pays again coming out. That's a five-figure item on an ordinary purchase and it appears in almost no relocation content about the state.

The reassuring part is procedural: Delaware requires attorney involvement in closings, so a New York seller won't find themselves at a table with nobody on their side.

For anyone working through what their Long Island home would net before any of that begins, that conversation is available whenever the timing suits.

This is general information, not legal, tax, insurance, or financial advice. Delaware transfer tax rates, assessment practices, credits, disclosure requirements, and retirement income treatment vary by locality and change over time. Confirm current specifics with a Delaware attorney, the relevant county, and a CPA, and confirm New York specifics with a licensed New York real estate attorney.

FAQs

Is Delaware really a low-tax state?

On almost everything, yes — no state sales tax, and property tax rates among the lowest in the country. The exception is large and rarely mentioned: Delaware's realty transfer tax is among the highest in the nation, with combined state and local rates commonly reaching four percent of the sale price and typically split between buyer and seller. A buyer generally pays around two percent at purchase — a cost with no New York equivalent — and the seller's share applies at eventual resale. Confirm rates for a specific municipality with a Delaware attorney.

Do buyers pay transfer tax in Delaware?

Customarily yes, which surprises New York buyers who pay none on a residential purchase. Delaware's combined realty transfer tax commonly reaches four percent and is typically split between the parties, so a buyer's share on a $600,000 home runs into five figures. It doesn't change whether the move makes sense — Delaware remains substantially cheaper than Long Island overall — but it's a closing cost that needs budgeting, and it applies again when you eventually sell.

Does Delaware require an attorney to buy a home?

Yes, and it's genuinely reassuring for a New York seller. Conducting a residential real estate closing in Delaware is treated as the practice of law, so a licensed Delaware attorney is part of the transaction rather than optional. That's considerably closer to New York's process than the escrow and title-company states common elsewhere. Two attorneys are needed rather than one since licensing is state-specific, and a New York attorney who handles relocations can often refer.

Are Delaware property taxes as low as people say?

The rates are genuinely among the lowest in the country. What's worth knowing is that the assessments underneath them were unusually stale — Delaware counties operated for decades on very old valuations, and court-ordered reassessments have been working through the system. A county reassessing to current values produces different bills for individual properties even where total revenue is constrained. Pull the actual current bill on a specific property and ask whether it reflects a recent reassessment.

What should I check about coastal Delaware properties?

The same things you'd check for waterfront anywhere: flood zone designation, National Flood Insurance Program claim history — which attaches to the address permanently and doesn't reset on sale — and whether an elevation certificate exists, since it significantly affects premium pricing. Get actual insurance quotes on specific addresses before offering rather than after. Coastal Delaware is also a distinct market in price behavior and seasonality, so comps from central or northern Delaware won't translate.

By Eric Berman, REALTOR® | The Eric Berman Team at Compass

Eric Berman | Long Island & Queens Associate Broker | Compass
1468 Northern Blvd, Manhasset, NY 11030
(917) 225-8596 | eric@ericbermanre.com | theericbermanteam.com