A new dimension to the classic real estate transaction and funding will soon be available courtesy of SEC rule changes. Delaware residents who have traditionally found participation in commercial real estate investments out of their reach are being given the chance to buy in through crowdfunding at starting rates as low as $5,000. This novel opportunity, like all investments, brings with it some risks.
In Sussex County Delaware, the First Time Home Buyer is someone that has never owned a home anywhere else. That qualifies the first time home buyer for a waiver of the Sussex County Transfer Tax which is one-half of the normal 3% of the purchase price of the house. This 3% is normally split between the seller and buyer in the real estate transaction. Half of the 3% (1.5%) goes to the State of Delaware and the other half (1.5%) goes to Sussex County. So, the Sussex County portion of 1.5% is waived for a first time homeowner and their seller. Therefore, the first time homebuyer pays only .75% to the State of Delaware and the seller gets an advantage to sell to a first time homebuyer and only pays .75% to the State of Delaware. Sussex County will collect nothing. Unfortunately, if the home is located in a town, this first time homebuyer transfer tax does not apply. The house must be in the unincorporated County or in the seven towns that have adopted this exemption. These towns are: