Frequently Asked Tax Questions about Delaware

Courtesy of Active Adults Delaware

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Have some questions about or looking for clarification on taxes and healthcare in Delaware? We've got answers. Here are some of the questions we hear most frequently from our buyers—and the answers we give. Not seeing your question here? Please contact us at any time!

Delaware Frequently Asked Tax Questions

Q. Can I get private health insurance?

A. This is important to retirees who are not yet 65.

There may be a gap of 5 years or more between the time that you are no longer covered by the health insurance of the company you worked for and your eligibility for Medicare. Or, perhaps you have been self-employed with coverage by a company that may or may not write insurance policies in Delaware.

For more information, visit the Delaware Insurance Department online.

Q. Is there a sales tax on automobiles?

A. No.

However, when you bring a vehicle into Delaware there is a one-time document fee, a.k.a. transfer tax of 4.25% of the purchase price or NADA book value, whichever is greater. Minimum document fee is $8. For more details, visit the Delaware Division of Motor Vehicles online or call the Delaware Division of Motor Vehicles at 302.853.1000.

Q. Property tax... what should I know?

A. All real property is subject to tax unless specifically exempt.

Personal property, tangible, and intangible property are all exempt. Real Estate is subject to county, school district, vocational school district and municipal taxes. The state offers various property tax relief programs for residents age 65 and older and for residents with disabilities. 

Q. Is school tax extra?

A. In Delaware, School Tax is included and billed as part of your County Tax.

However, for homeowners age 65 and over, once you have been a primary resident for 10 years (effective January 1, 2018 for new residents) you may get a credit equal to half of the school property taxes, up to $400. You must pay your property tax bill in full by the end of each tax year in order to qualify for this credit for the subsequent property tax year. Learn more about how to qualify for the School Property Tax Relief for Individuals Age 65 or over: Read more here.

Q. Does Delaware have income tax?

A. Yes.

Delaware does have an income tax that ranges from a low of 2.2% to a high of 6.6%, depending on income bracket. Standard deductions are $3,250 if you are single and not itemizing or $6,500 if married, filing jointly and not itemizing. For more details, see Delaware’s Tax Structure.

Q. Does Delaware tax social security?

A. No

Social Security and Railroad Retirement Benefits are exempt from Delaware Income Tax.

Q. What about a retirement income tax?

A. That depends.

Taxpayers 60 years old and older may exclude $12,500 of investment and qualified pension income. Out of State government pensions qualify for the pension exemption. Under age 60, $2,000 is exempt. 

Q. Are there personal property taxes?

A. There is no personal property tax in Delaware.

What Else Do I Need to Know About Delaware?

Still have questions or wondering what else you need to know about living in Delaware? Just ask us!

Please note: we've done our best to provide you with the most accurate and up-to-date information possible, but since laws are always changing, we can't guarantee the accuracy of the information. For the most current updates and data, please visit Delaware's tax information page.

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