Tax Advantages of Buying Retirement Real Estate in DE (Delaware)
Buying Delaware Retirement Real Estate Offers Tax Advantages &
Income Tax in De(Delaware) (Delaware) DE State Tax
The Delaware Beach Real Estate market provides an excellent opportunity for those looking for a Delaware retirement to take advantage of the DE’s low property taxes. If you plan to move to another state when you retire, it only makes sense to examine the tax burden you’ll face when you arrive. State taxes are increasingly important to everyone, but retirees have extra cause for concern since their income may be fixed.
We will explore information on Income Tax in De(Delaware) & (Delaware) DE State Tax, state income taxes, sales and fuel taxes, taxes on retirement income, property taxes and inheritance and estate taxes, as well as sales and fuel taxes.
Significant Tax Advantages in DE
• NO State sales tax. DE State Sales Tax
Delaware does not collect sales taxes. Delaware collects a Gross Receipts Tax (GRT) which is a business and gross receipts tax that can total 2.07%. States with the highest sales tax are: California (8.25%), Indiana (7%), Mississippi (7%), New Jersey (7%), Rhode Island (7%), Tennessee (7%), Minnesota (6.875%), Nevada (6.85%), Arizona (6.6%), Washington (6.5%), Kansas (6.3%), Texas and Illinois (6.25%).
• NO State tax on Social Security income.
• NO personal property taxes.
• One of the lowest property tax burdens in the nation. Sussex County homeowners taxed on 50% of property’s current market value based on a 1974 assessment and with no property tax increases for over 21 years, the average 2011 Sussex County property tax bill on a single-family home was only just over $100 annually. (Sussex County Government May 18, 2010)
• Kiplinger’s PERSONAL FINANCE Magazine picks DE as one of the 10 most tax-friendly states for retirees.
• Pension Exclusions: For each person 60 and over, up to $12,500 of pension and eligible retirement income are exempt from Delaware income tax.
• Each qualified homeowner 65 and older in Sussex County receives a Senior Citizen Property School Tax Credit up to $500.
• $110 in tax credits multiplied by the number of persons age 60 and over, plus the number of personal exemptions allowed for Federal purposes.
• America’s Most Wealth Friendly States: Ranked as one of the top four states (with Alaska, Nevada, and South Dakota) as being the Best States for Trusts. Major reasons: No tax on assets held in a trust, allow dynasty trusts permitting assets to pass to future generations and avoid estate taxes, seek to protect trust assets from lawsuits and creditors. SOURCE: Thetrustadvisor.com
• Corporate Capital of the World:Delaware’s pro-business tax and corporate laws have made it a corporate haven. As of November 2010, nearly 900,000 companies are charted as Delaware corporations. In the last seven years 80% of new IPOs have made Delaware their corporate home.
Rental/Investment Property Possibilities
A vacation home is only considered rental property if you rent it out for more than two weeks per year. If you wish to keep it as a family retreat or retirement property, renting your property out for can bring in enough extra income to help pay for property taxes, upgrades, and maintenance.
Primary Home Sale Exclusion
There are no age requirements for the Primary Home Sale Exclusion on up to $250,000 profit for a single home seller and up to $500,000 gain for joint returns, on any house you’ve owned and occupied as your main residence for at least two of the five years before the sale.
All information presented is subject to change without notification. Please consult with an attorney or tax advisor regarding eligibility for any tax or other benefits.