Moving to Delaware From Pennsylvania: What It Actually Saves You

Part of our Delaware Retirement and Second Home Guides.

By Christine Davis, REALTOR and Co-Owner, Active Adults Realty, Lewes, Delaware. Published September 29, 2026. Tax figures on this page were checked September 29, 2026.

Prefer to read? The full guide is written out below.

If you grew up in Pennsylvania, your beach was the Jersey shore. Mine was. I grew up in Pittston, up in the northeast corner between Wilkes-Barre and Scranton, and when my family went to the ocean we went to Jersey. That is just what you did.

I have spent the last twenty seven years living at this one instead. So I want to answer the question people from Pennsylvania are thinking and do not often say out loud. If you already have a beach, why would you retire to Delaware?

You are going to get the honest version, including the parts that are not flattering, because I have watched a great many people make this move since 1999 and I have seen it go beautifully and I have seen it go badly.

How does somebody from Pennsylvania end up here in the first place?

For me it was the Air Force. I enlisted while still in high school and spent a little over eight years in civil engineering, stationed in Holland, Korea and New Mexico. My last assignment was Andrews Air Force Base over in Maryland, and that is when I found this place. Not through a childhood memory. I found it the way half the people in Rehoboth found it, by getting in the car on a Friday afternoon and driving over the Chesapeake Bay Bridge with everybody else.

After I separated I worked in Washington for a while, and I realized I was spending my whole week commuting and waiting for that drive to Delaware. So in 1999 I stopped driving back.

I want to be honest about one thing there. I did not move here to retire. I moved here in my working years, on my own, not knowing very many people. I finished my degree at Delaware Tech and worked for a physician organization before a friend badgered me into getting my real estate license in 2003. I mention it because a lot of people reading this are wondering whether they could really do it. I did it without a plan and without a support system already in place, and it worked. But I did it in my twenties, not at seventy, and that is a real difference and I am not going to pretend it away.

What does the tax difference between Pennsylvania and Delaware actually come to?

Here is where I think most of what you will read on this subject gets it wrong.

Everybody leads with no sales tax. That is true. There is no sales tax in Delaware at all, on anything. Pennsylvania's is 6 percent at the state level, 7 percent in Allegheny County and 8 percent in Philadelphia. You notice the difference in a small, steady way, buying a sofa or a lawn mower or eating out.

The bigger one is property tax. Delaware property taxes are among the lowest in the country, and that is true in all three counties, not just at the beach. If you are in a Pennsylvania township where the school tax has climbed every single year, that gap is not small and it does not go away.

But here is the part missing from almost everything written on this. Pennsylvania is already good to retirees on income. Pennsylvania does not tax Social Security. Pennsylvania does not tax your pension or your retirement plan withdrawals once you have retired and met the plan's retirement conditions. So if somebody tells you that you are going to save a fortune on retirement income by coming to Delaware, be careful with that. Delaware also does not tax Social Security, and once you turn 60 you can exclude up to $12,500 a year of pension and other eligible retirement income, but if you are coming from Pennsylvania you were probably not being hammered on that to begin with. And one honest point the other way: Delaware's income tax on what is left after that exclusion is graduated and runs higher than Pennsylvania's flat 3.07 percent. If you will have large investment income or keep working, put that on the list too.

The differences that are genuinely real are sales tax, property tax, and one more that hardly anybody mentions. Pennsylvania has an inheritance tax. Delaware does not. In Pennsylvania, what you leave to your children gets taxed. A spouse is exempt, but adult children pay a rate, brothers and sisters pay more, and anybody else pays more again. Delaware has no inheritance tax and no state estate tax. Nobody sells a house over that, but if you are at the stage of life where you think about what you leave as much as what you spend, it belongs on the list. In twenty three years of doing this I have watched very few people bring it up on their own.

Delaware and Pennsylvania side by side, as a starting point for your accountant

Figures checked September 29, 2026. This is a list of what to ask about. It is not advice and it is not a calculation of your own bill.

	Delaware	Pennsylvania
State sales tax	None	6.00 percent state. 7 percent in Allegheny County and 8 percent in Philadelphia. 6.34 percent average combined.
Effective property tax rate on owner-occupied housing	0.54 percent	1.26 percent
Social Security	Not taxed	Not taxed
Pension and retirement plan withdrawals	Up to $12,500 a year excluded at 60 and older ($2,000 under 60)	Not taxed once you have retired and met the plan's retirement conditions
State income tax rate on other income	Graduated, 2.20 percent to 6.60 percent	Flat 3.07 percent
Inheritance tax	None	Spouse 0 percent. Direct descendants and lineal heirs 4.5 percent. Siblings 12 percent. Other heirs 15 percent. A parent inheriting from a child 21 or younger is 0 percent.
State estate tax	Repealed for deaths after December 31, 2017	None

Property tax, sales tax and income tax rates are Tax Foundation 2026 state tax data. Pennsylvania's local sales tax rates, income tax rate, retirement income treatment and inheritance tax rates are the Pennsylvania Department of Revenue's own published figures. Delaware's Social Security treatment and the pension exclusion are from the Delaware Division of Revenue and the Delaware Code, and the estate tax repeal from the Delaware Department of Finance. All read September 29, 2026.

Is the property tax the same in all three Delaware counties?

No. Property tax is the one figure here that changes with where you land, because it is set by the county, the school district and the town. Tax Foundation's 2026 county table, built on Census five year estimates for 2024, puts the effective rate on owner-occupied homes at about 0.72 percent in New Castle County, 0.43 percent in Kent County and 0.31 percent in Sussex County. All three are well under Pennsylvania's 1.26 percent. Everything else in the table above, the sales tax, the income tax, the pension exclusion and the inheritance tax, is state law and is the same in all three counties.

Delaware also has a school property tax credit for older homeowners that works the same way statewide. We wrote it up on our Delaware senior school property tax credit page.

What does it all add up to? Less than you will be promised and more than you would think. I am not going to give you a number, because anybody who does is guessing at your situation. The savings here are the boring kind. They show up quietly every month, in the tax bill and at the register. There is no windfall.

And the thing that actually changes people's budgets is usually not tax at all. It is that they stop paying to come to the beach, because they are already at it. Twenty five years of a rental week, or a second place, or the gas and the tolls and the Friday traffic. That line just disappears. Nobody puts it in a comparison chart, and for a lot of the people we work with it is the biggest number in the whole exercise.

Does it have to be the beach?

No, and plenty of the people we help from Pennsylvania never look at the beach at all. Delaware has three counties, and people coming from Pennsylvania land in all three.

• New Castle County. The northern county, and the one that shares a border with Pennsylvania. Wilmington, Newark, Hockessin, Middletown. If your family is staying in Chester County or Delaware County, this is where they stay a short drive away instead of a long one. Of the three counties it has the highest property tax, and it is still well below Pennsylvania's.
• Kent County. The middle of the state. Dover, the state capital, plus Smyrna, Camden and Milford, which sits on the Kent and Sussex line. You get more distance from the summer crowds, and the beaches are still a day trip down Route 1.
• Sussex County. The beaches and the towns behind them. The lowest property tax of the three, the most new construction, and the summer traffic I talk about below.

The tax picture above holds in every one of them. What changes is the drive to your family, the drive to the ocean, and the property tax line. Tell us which of those matters most and we can show you all three counties side by side.

If it is the beach, which Delaware beach town is actually which?

From a distance these all look like one stretch of sand. They are not remotely the same place, and this is where people get genuinely stuck.

• Lewes. Historic, walkable downtown, and the hospital right there. That matters far more than people want to admit at 62 and it matters enormously at 82. It sits on the bay rather than the ocean. It is one of the more expensive of the group and has been for years.
• Rehoboth Beach. The boardwalk, the ocean, the outlets. In July it is busy in a way that you either enjoy or find completely unbearable, and you already know which one you are.
• Milton. Inland on the Broadkill River, about fifteen minutes from Lewes. A real small downtown and a brewery people drive to. You trade walking distance to the ocean for a meaningfully different price.
• Millsboro. Further inland, the other side of the Inland Bays. A lot of the newer active lifestyle communities are here and your money goes furthest of anywhere on this list. You will drive to the beach, not walk.
• Bethany Beach and Ocean View. A quieter stretch south of Rehoboth. Bethany is small and expensive. Ocean View sits behind it and it is where a lot of people actually land.
• The Harbeson area. The stretch between Milton and Lewes where a great deal of the new construction has gone in.

Here is what I would tell you as a friend rather than as an agent. The real difference between these towns is how far you are willing to drive and how much summer traffic you are willing to sit in. Answer those two honestly and the list gets very short very quickly.

What is the summer traffic really like?

It is real, and the honest way to find out is not to read about it.

Drive it at the wrong time. Drive from the house you are considering to the grocery store, to the hospital, and to the beach, on a Saturday in July, not a Tuesday in March. The Saturday drive is the one you will actually be doing.

And then do the opposite visit, because that is the one nobody does. I have now had twenty seven Januaries and Februaries here, so let me tell you properly. It is quiet, genuinely quiet. Some restaurants close for the season, some of them for months. You can park just about anywhere in Rehoboth, which in August sounds like a fantasy and in January is simply a fact.

The weather is milder than Pennsylvania. That part is completely real. Less snow. I did not say no snow, just less, and when it comes it usually does not stay. Coming from the Wyoming Valley, that is the thing that most exceeded my expectations and it still does.

But mild and busy are not the same thing, and I have watched people struggle with the second one for twenty seven years. The people who do well here in the offseason arrived with something to do. A hobby, a volunteer thing, part-time work, family close enough to matter. The ones who struggle pictured July and then found themselves in a beautiful, quiet house in the third week of January with nothing on the calendar.

I am not trying to talk you out of it. The offseason is when this place is at its best and it is why I stayed. But come and see it. Come down in February, stay a weekend, and notice how you feel on the Sunday. That is the visit that tells you something true. The July one already told you what you wanted to hear.

What does your money buy across the Delaware beach towns?

There is a ladder here and it is worth knowing before you start looking. Lewes and Bethany sit at the expensive end. Rehoboth is its own market and behaves like one. Milton buys you meaningfully more house for a fifteen minute drive. Millsboro is where your money goes furthest on this list. Ocean View is where a lot of people land once they have priced Bethany and decided against it.

I am deliberately not putting dollar figures in a paragraph that will be read a year from now. Ask us for the current numbers in the specific towns you are weighing and you will get today's, not last season's.

What surprises people most about the houses themselves

Three things, and none of them is the price.

The fees. Most of what is being built here sits in a community with an association, and the fee is not a small line. It varies enormously and it covers wildly different things from one place to the next. Some cover the lawn, the pool and the roads. Some cover almost nothing. Get the actual number, and what it includes, in writing for that specific community before you fall in love with the floor plan. This is the single most common surprise I see and it is entirely avoidable. We wrote it out in full on our Delaware HOA fees page.

One level living. Almost everybody says they want it, and not everybody buys it, because the two story is often prettier or cheaper or available sooner. I would gently say that if this is the last house, it is the one you still want to live in comfortably in fifteen years. The stairs are not a problem today, but today was never the question.

Insurance and flood. It is the coast. Some of it is in a flood zone and a lot of it is not, and the difference in what you pay can be significant. That is not a reason to avoid anywhere. It is a reason to get the quote before you are under contract instead of after.

New construction versus resale deserves its own page, and it has one. New gets you exactly what you want and a long wait. Resale gets you trees, a finished neighborhood and somebody else's kitchen. There is no right answer, only which one suits you and how patient you are. Where the new construction timelines stand right now is on our Sussex County subdivision pause page.

What should you do before you decide?

Four things to do first, and the fourth one is the test.

1. Come in the offseason. It costs you one weekend and it is the most useful thing on this page.
2. Drive it at the wrong time. The Saturday in July drive, from the actual house, to the grocery store, the hospital and the beach.
3. Take the tax question to your own accountant, with your own real numbers. Not a video, not a chart, not us. And ask specifically about the Pennsylvania inheritance tax difference, because it does not come up on its own.
4. Describe your ordinary Wednesday in November, not your summer. If you can describe it honestly and it sounds good to you, you will be very happy here. If you cannot, that is not a reason to stay away. It is just something to work out first rather than after.

I came here in 1999 on my own. I did not know many people and I did not have any of this worked out. Twenty seven years later there is a house with grandchildren in it, a cat named King who is a king, and a dog named Dog, named after the dog in the film Up. None of that was on the legal pad. You cannot plan that part and you should not try. What you can do is get the boring parts right, which is what this whole page has been about.

Ask us the question you cannot get a straight answer on

Genuinely. What is the one thing about moving down here from Pennsylvania that nobody has given you a straight answer on? Ask us, and we will tell you what we know, including when the honest answer is that it depends.

Active Adults Realty
1504 Savannah Road, Lewes, DE 19958
Call 302-549-5164
Contact us

Nothing on this page is tax, legal or financial advice. Christine Davis is a licensed REALTOR, not an attorney or an accountant. Confirm your own situation with a tax professional. Active Adults Realty is an independent brokerage serving Sussex, Kent and New Castle counties, Delaware. Equal Housing Opportunity.

Sources

• Tax Foundation, 2026 Delaware Tax Rates and Rankings, and 2026 Pennsylvania Tax Rates and Rankings.
• Tax Foundation, State and Local Sales Tax Rates, Midyear 2026.
• Tax Foundation, Property Taxes by State and County, 2026.
• Pennsylvania Department of Revenue, Inheritance Tax; Tax Rates; Personal Income Tax Guide, Gross Compensation; Personal Income Tax (REV-581).
• Delaware Division of Revenue, Personal Income Tax FAQs.
• Delaware Code, Title 30, Chapter 11, Subchapter II, Section 1106.
• Delaware Department of Finance, Estate Tax statutory provision (Title 30, Chapter 15).