CHAPTER 82
FORMERLY
SENATE BILL NO. 255
AN ACT TO AMEND CHAPTER 302, VOLUME 49, LAWS OF DELAWARE, ENTITLED AN ACT TO INCORPORATE THE TOWN OF FENWICK ISLAND, DELAWARE" RELATING TO TAXES; AND PROVIDING FOR A REALTY TRANSFER TAX.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all members elected to each House thereof concurring therein):
Section 1. Amend Section 24, Chapter 302, Volume 49, Laws of Delaware, by designating all of present Section 24 as new subsection A., and entitling said new subsection A. as follows:
"A. Town taxes, generally."
Section 2. Amend Section 24, Chapter 302, Volume 49, Laws of Delaware, by adding
thereto a new subsection, which new subsection shall read as follows:
"B. Realty Transfer Tax.
(a) Amount of tax.
(1) Each person who makes, executes, delivers, accepts or presents for recording any deed or lease, except as excluded by paragraph (h), or in whose behalf any deed or lease is made, executed, delivered, accepted or presented for recording, shall be subject to pay for and in respect of the transaction or any part thereof, a reality transfer tax at the rate of one percent (1%) of the value of the property represented by such deed or lease. Such tax shall be payable at the time of making, execution, delivery, acceptance or presenting of such document at closing.
(2) The transfer tax shall be apportioned equally between the parties to the transaction in the absence of an agreement to the contrary.
(3) No tax shall be imposed on any conveyance when the actual value of the property being transferred is less than One Hundred Dollars ($100.00).
(b) Judicial Sales.
The tax imposed by this Ordinance shall be paid from the proceeds of any judicial sale of real estate as part of the costs of such judgement or estate and of the writ upon which the sale is made.
(c) Affixing of Notation of Payment.
The payment of the tax imposed by this Ordinance 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 or her office. Such notation- shall be conclusive evidence of payment as to any subsequent purchaser relying thereon.
(d) Responsibility for Collection and Remitting.
It shall- be the responsibility of any settlement attorney, bank, trust company or other agent handling the settlement of each transaction covered hereby to collect the tax from the appropriate party(ies) and to remit such amount to the Town within fifteen (15) days of such settlement.
(e) Prohibited Act.
No person shall 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.
(f) Additional Tax; Refunds
In the event the State of Delaware determines that additional taxes are due under Title 30 Del. C. Chapter 54, then additional taxes shall be due to the Town in accordance with the valuation of the transfer as determined by the State, together with interest thereon at the legal rate. Refunds shall likewise be determined and paid.
(g) Definitions.
(1) "Deed" shall mean and include any instrument or writing pursuant to which title or possession of any real estate situate within the corporate limits of the Town which shall be quitclaimed, granted, bargained, sold, conveyed or transferred by a seller, vendor, grantor, assignor or transferor to any purchaser, buyer, vendee, grantee, assignee or transferee, except as provided in paragraph (a) of this subsection.
(2) "Lease" shall mean and Include any document or instrument in writing transferring or purporting to transfer a title or possessory interest by a seller, vendor, lessor, assignor or transferor to any purchaser, buyer, vendee, lessee, assignee or transferee in or to any of the following:
(i) A condominium unit or any property or properties subject to the Unit Property Act (25 Del. C. §2201, et seq.) for a determinable term of five (5) years or more;
(ii) An Interest in land owned by another and/or improvements owned by another located on land owned by another for a determinable term of five (5) years or more;
(iii) The exercise of any right or option to renew or extend the title possessory interest in an existing document or instrument In writing when such renewal or extension is for a period of five (5) years or more.
(3) "Transaction" shall mean and include the making, executing, delivering, accepting or presenting for recording of a deed or lease as defined herein.
(4) "Value" shall mean and include In the case of a deed 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 where such liens and 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, values 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 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 assessment of such lands, tenements or hereditaments as shown on the books of Sussex County.
(h) Deeds and Leases.
"Deed" and "lease" shall not include any of the following:
(1) Any conveyance by will;
(2) Any mortgage;
(3) Any lease other than those described or defined In Section 7 (b);
(4) Any conveyance between persons who were previously husband and wife but who have since been divorced, provided such conveyance is made after the granting of the Final Decree in Divorce;
(5) Any conveyance between husband and wife;
(6) Any conveyance between parent and child or a spouse of such child;
(7) Any conveyance to a trustee, nominee or straw party for the grantor as beneficial owner;
(8) Any conveyance for the beneficial ownership of a person other than a grantor where, If such person were the grantee, no tax would be imposed upon the conveyance pursuant to this Ordinance;
(9) Any conveyance from a trustee, nominee or straw party to the beneficial owner;
(10) Any conveyance between a parent corporation and a wholly owned subsidiary corporation, provided such conveyance Is without actual consideration;
(11) Correctional deed without actual consideration;
(12) Any conveyance to or from the United States, the State of Delaware, or any instrumentality, agency or political subdivision of the State;
(13) 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, or Interest therein being conveyed;
(14) Any conveyance by the owner of a previously occupied residential premises to a builder of new residential premises when such previously occupied residential premises were taken in trade by such builder as a part of the consideration from the purchaser of new, previously unoccupied premises;
(15) 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;
(16) 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;
(17) Any conveyance made pursuant to a contract executed prior to July 1, 1989;
(18) Any conveyance made by or to an individual, a corporation or partnership when there is no change in beneficial interest;
(19) Any conveyance made by or to any organization exempt from ad valorem real estate taxes.
(I) Special Account.
The Town Council or its appropriate authorized representative shall open and maintain a special bank account to be designated as "Town of Fenwick Island - Beach Renourishment" account Into which all proceeds of this tax shall be deposited and accumulated. Such funds shall be earmarked for beach renourishment costs but in the discretion of the Town Council may be used for general budgetary requirements if needed."
Section 3. No ordinance providing for a tax on the transfer of real property or any interest in real property authorized under this Act shall become effective until it shall be approved by a majority of the qualified voters of the Town of Fenwick Island at a Special Election to be held pursuant to a Resolution adopted by the Town Council of the Town of Fenwick Island. The Town Council shall give notice of the Special Election by printing a copy of the Resolution calling the Special Election in at least two (2) issues of a newspaper having a general circulation within the corporate limits of the Town of Fenwick Island within thirty (30) days immediately preceding the date of 'such Special Election. At the said Special Election, every person who is a bona fide resident of the Town of Fenwick Island or who would be entitled at the time of the holding of the said Special Election to register and vote in the Annual Municipal Election, if such Annual Municipal Election were held on the day of the Special Election to be held pursuant to the provisions of this Act, may vote at the said Special Election regardless of whether such person is registered to vote in the Annual Municipal Election. The Special Election shall be held by a Board of Election to be appointed by the Town Council of the Town of Fenwick Island at least two (2) weeks before such Special Election. The Board of Election shall consist of an inspector of the Special Election and such judges as shall be appointed by the Town Council. If a majority of the •votes cast at the Special Election shall be in favor of the transfer tax authorized by this Act, the tax may be levied and collected as provided for in this Act. The Board of Election holding the Special Election shall meet immediately after the close of such Special Election to ascertain the result and shall certify the result to the Town Council. The hours of the Special Election shall be established by the Town Council and shall be clearly noted, together with notice of date and place in the Resolution calling said Special Election. Such persons who are in the polling place at the hour appointed for said Special Election to end shall be entitled to vote even though such votes may be cast after the appointed hour. If the majority of the votes cast at any Special election held under this Act shall be against the levying of the tax authorized by this Act, the proposition shall not again be submitted to the qualified voters until the expiration of ninety (90) days from the date of the said Special Election."
Approved July 7, 1989.