Moyer: Incentives could ‘spark’ home sales in Harrington

HARRINGTON — A portion of transfer taxes may soon be waived for first-time home buyers in Harrington following discussions with city government officials and a new builders and contractors’ committee.

Harrington HubDuring a Harrington City Council workshop, Harrington City Manager Terry Tieman said the idea of waiving the tax is a direct result of suggestions made during a meeting with the new committee. The waiver would cover only the city of Harrington’s portion of transfer taxes.

The current transfer tax rate in Delaware is three percent of the final sale price on a property with both local and state governments assuming half of the taxes received.

“We can’t give away what we don’t have. But for our part, I don’t think it’s a significant amount and we don’t put it in the budget,” she said. “Last year, we sold five houses which, on average, were at $130,000.”

For the average home sold in the city of Harrington, the savings to the buyer could be $1,500 or more.

Darrin Simpson of Blue Hen Construction and committee member said contractor profits will not be impacted by a new offer from the city such as a transfer tax waiver.

“That’s something that’s passed along to the buyers. What that’s going to do is be a good PR to the realtors and first-time home buyers,” he said. “That’s a good foot forward to show the realtors in the area that the city of Harrington really wants residents and they’re willing to take the same cut most of the other areas in the state are doing.”

Councilmembers agreed an incentive might help bring new homeowners to town.

“It could spark the interest in coming back down here. Anything to liven things up after five houses in one year,” Harrington Mayor Anthony Moyer said optimistically.

The council approved a first reading of the proposed transfer tax waiver during a special meeting held after the workshop. Councilmembers anticipate a public hearing and second reading at a future meeting.

Councilmembers also voted to allow for debt refinancing of up to $3.5 million without voter approval, a process that can take more time and month than necessary, according to Mayor Moyer.

“Referendums cost money. It’s really a waste of money to go to referendum when, in fact, if we chose we needed money, we wouldn’t have to go to a referendum. It’s really a housekeeping change,” he said during the meeting. “It’s an expense that’s certainly not needed.”

Ms. Tieman agreed, saying, “It just seems like a no-brainer when you’re saving money to not have to go back to the voters. And they felt the same really.”

Although councilmembers voted to pass the resolution, it must also pass through state legislation. A super majority of council would then be required to approve refinancing debts of up to $3.5 million without requiring a referendum.

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