Delaware gift deed

What a gift deed does in Delaware

A gift deed transfers property with no money changing hands, and it says so on its face. Stating the donative intent matters: it can support a transfer-tax exemption in states that tax transfers and it documents that the recipient paid nothing, which is exactly what a recorder, an assessor, and later the IRS will want to see. Mechanically it operates like a quitclaim. Immediate, and without title warranties.

In Delaware a gift is taxed like a sale: about 4% of the property's highest assessed value, unless an exemption applies, such as a gift between spouses, parent and child, siblings, or grandparent and grandchild (30 Del. C. §§ 5401(1), 5401(4)).

The Delaware law behind this deed

Delaware has no section written specifically for gift deeds. The instrument runs on the general conveyancing and recording statutes below, which is why the requirements here look like those for any other deed in the state.

When Delaware property owners use a gift deed

• Give a house or land to a child or grandchild
• Transfer property to a sibling or parent for no payment
• Record that a transfer is a gift, for tax and title records
• Make a charitable gift of real estate

A $10 or love-and-affection recital does not lower Delaware's tax, which is figured on the greater of the price and the property's highest assessed value (30 Del. C. § 5401(4)).

What Delaware requires on the deed

These are the execution and formatting rules recorders of deeds enforce. Getting any of them wrong is the usual reason a deed comes back in the mail.

How to complete and record it in Delaware

1. 1Find your current deedYou need the legal description from it, word for word. If you can't find your copy, the Recorder of Deeds can provide one, usually for a few dollars.
2. 2Identify everyone by full legal nameNames must match the current deed and government ID exactly, middle names included. A mismatch creates a gap in the chain of title that shows up years later at closing.
3. 3Complete the deedDeedly builds it with the wording and notary certificate used for Delaware deeds, and lays out page one the way your county's recorder asks.
4. 4Sign in front of a notaryBring photo ID. Wait to sign until you are in front of the notary: you have to appear before the notary anyway, and signing there leaves no question about who signed.
5. 5Complete Form RTT-TAX (Realty Transfer Tax Return) and the county's transfer tax formsDelaware requires them with every deed, including exempt transfers, and Form RTT-TAX is signed in front of a notary. Your filing packet lists the forms your county asks for.
6. 6Record it with the Recorder of DeedsFile in the county where the property is located and pay the recording fee. Many offices in this state also accept e-recording, but usually only from approved submitters such as title companies. Keep the stamped receipt. It fixes your priority date.
7. 7Update insurance and tax recordsA change of ownership can affect your homeowner's policy, your homestead or senior exemption, and in some states the assessed value. Do this within a few weeks.

What it costs in Delaware

Delaware charges a realty transfer tax of 4% in most places (2.5% to the state and 1.5% to the county or town), on the price or the property's highest assessed value, whichever is greater. Who pays is negotiated between the parties. The state rate is 3% of the value, or 2.5% where the county or town has enacted the full 1.5% local tax, which is the usual case (30 Del. C. § 5402(a)). Where the local tax is less than the full 1.5%, the state rate stays 3%: Hartly, Kenton and Woodside in Kent County have a 1% local tax, and Arden, Ardentown and Ardencroft pay 3% in all, because New Castle County lists no local tax for them. The 4% already includes the county or town share, so nothing is added on top. Some towns collect their share at town hall and stamp the deed before the recorder will take it, so check whether the property is inside town limits. We could not confirm every town's rate (Wilmington's, for one), so ask the county Recorder for the property's. The value is the price including liens, or the property's highest assessed value if that is higher, unless a lower fair market value is shown, which an arm's-length sale between unrelated parties does (§ 5401(4)). Delaware's code says the state tax is to be apportioned equally between grantor and grantee (§ 5402(a)), and also that between the parties, absent an agreement to the contrary, the burden of paying it is on the grantor (§ 5412). Either way the parties can agree otherwise, and the Division of Revenue says the tax is typically shared equally. To the State, every person who makes, accepts or presents a taxable document for recording is liable for the tax (§ 5402(a)). We could not find which rule governs when a contract says nothing, so agree in writing who pays before you record.

Exemptions that commonly apply to a transfer like this: between spouses (30 Del. C. § 5401(1)g), between former spouses after the final divorce decree for property acquired during the marriage (§ 5401(1)h), between parent and child or the child's spouse (§ 5401(1)i), between siblings including half siblings and step siblings (§ 5401(1)w), between grandparent and grandchild or the grandchild's spouse (§ 5401(1)aa), to a trustee or nominee for the grantor as beneficial owner and back from that trustee to the beneficial owner (§ 5401(1)j), correction deeds with no payment (§ 5401(1)l), to or from a company whose owners hold it in the same shares as they held the property (§ 5401(1)n), and the first-time home buyer reduction of the buyer's state share by 0.5% of up to $400,000 of value (at most $2,000) claimed on Schedule RTT-SCH (§ 5402(c)). Name the exemption and its 30 Del. C. § 5401(1) paragraph in Part D of Form RTT-TAX, and on the county's or town's exemption affidavit. The family exemptions apply whether or not money changes hands, but nieces, nephews, aunts, uncles, cousins, parents-in-law, unmarried partners and friends are not exempt. The recorder won't apply it for you.

Where to record it in Delaware

Delaware deeds are recorded with the Recorder of Deeds in the county where the property sits, not where you live. There are 3 counties in Delaware.

Many Delaware recording offices accept e-recording through vendors such as Simplifile, CSC, or ePN. E-recording is generally open only to approved submitters such as title companies, attorneys, and lenders, so if you prepared the deed yourself, plan to record in person or by mail. Some offices accept filings from the public through those vendors; your county's website will say.

Recording offices we cover in Delaware: New Castle, Sussex, Kent. See all Delaware recording offices.

What a gift deed does NOT do

Being honest about the limits is more useful than a sales pitch. Every one of these catches somebody out.

• The recipient takes your original cost basis, not the current market value. A later sale can produce a large capital-gains bill that inheriting the property would have avoided.
• A gift over the annual exclusion requires you to file IRS Form 709, even if no tax is due.
• It is irrevocable once delivered and recorded. You can't take the property back if the relationship changes.
• Gifting a property within Medicaid's look-back period can create a penalty period for long-term-care eligibility.

Quirks of Delaware law that catch people out

• Delaware has only three counties (New Castle, Kent and Sussex), so there are just three recording offices statewide.
• Every deed must show the county tax parcel number, and the words "Prepared by" with the preparer's name and address, on page one, or the recorder will not record it (9 Del. C. § 9605(f), (h)).
• Delaware's realty transfer tax, 4% in most places, is one of the highest in the US, and a gift is taxed on the property's highest assessed value unless an exemption applies. A transfer on death deed owes none.
• Delaware allowed transfer on death deeds starting December 4, 2025. Almost everything written before then says Delaware has none.
• A Delaware TOD deed needs two witnesses, and at least one of them cannot be a beneficiary. Ordinary Delaware deeds need no witnesses at all.
• Only an individual can make a Delaware transfer on death deed, and only individuals can be its beneficiaries: not a trust, charity or company (25 Del. C. §§ 202, 205).
• Tenancy by the entirety is available and is the default presumption for married couples taking title together.

How to hold title in Delaware

When two or more people take title in Delaware and the deed says nothing more, the law presumes a tenancy in common, which means no automatic survivorship. If you want the survivor to take the whole property, the words have to be on the deed. Forms of co-ownership available in Delaware: tenancy by the entirety (married couples only), joint tenancy with right of survivorship, and tenancy in common.