I thought Delaware has lower taxes!

Delaware has lower taxes than almost any state I can think of in the Mid-Atlantic or the Northeast, but how low depends on where you buy and in what kind of community.

Just in the past year, we have worked with Buyer Clients from Long Island, Northern New Jersey and Connecticut that are currently paying property taxes of $15,000, $20,000 and more per year and that’s not all. The real problem seems to be how much their taxes have been going up. As they start planning for retirement, that growing tax liability is scary.

Many are discovering Delaware where we not only have lower property taxes, we also have no sales tax and it’s a really nice place to live. But back to the taxes –

What are the property taxes in Delaware?

• Everyone in Delaware pays a County Property Tax. This property tax tends to range from approximately $1,000 per year to perhaps $3,000 per year in the poshest neighborhoods. The School Tax is a part of that annual tax. When you are 65 and you have been a primary resident of Delaware for at least 3 years, your school tax is reduced or disappears. Ask us for more details.
• If you buy a home that is within town or city limits, there will be an additional property tax. Typically, that town/city tax is in the Hundreds not Thousands of dollars per year.
• If there is a Special Tax*, that is normally billed annually by the town/city in which your neighborhood is located.

I just want the lowest taxes possible!

We can find you a home with very low taxes in many parts of Delaware. Some of our clients are paying less than $1,000 a year in total property taxes. They do not have a clubhouse and amenities and are perfectly happy in established neighborhoods where they will be cutting their own grass.

If you want all the bells and whistles, you will not have the absolutely lowest taxes. But, I bet you will still be paying a lot less than you are currently paying in NJ, CT, NY and you are not getting all of the amenities and lifestyle that living in a new active adult community in Delaware offers.

We all have choices…

I often tell clients that “taxes alone is not enough of a reason to up and move to another state”. There are other options. You could just move to a smaller home or condo in the next town or the next county near your current home. Even in NY, NJ and CT, there are towns with lower taxes than others.

What many of our clients want however is a comparable home or neighborhood, maybe a little bit smaller, with more first floor living. In our experience, they want to “downsize” their taxes and cost of living but not necessarily the size of their home.

We would love your comments or feedback. How do property taxes affect your decision about relocating when you retire?

* Special Taxes typically cover the cost of infrastructure like public roads, public water and sewer systems. Municipal bonds are issued to finance these improvements. Homeowners purchasing in a Special Tax district pay their portion over a period of pre-determined years (typically 30 years).

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