Moving to Delaware: Fiscal Advantages
August 22, 2016
In previous posts, we have outlined some of the great fiscal advantages of Delaware, making it one of the best places to retire . In honor of the 2015 tax season (which closed on the unusual date of April 18), several websites reviewed state tax rates in the United States—and Delaware comes out significantly ahead.
Delaware is #1
According to a recent WalletHub survey, Delaware comes out 2nd in the country for overall tax rates, just behind Alaska. Delaware also boasts the second lowest total effective state and local tax rates in the nation, more than 43 percent lower than the national average.
But when cost-of-living is factored in, Delaware comes out 1st as the most tax and cost efficient state in the country for its residents. That is especially remarkable when you consider its central location on the very expensive mid-Atlantic coast, where every other state imposes higher tax rates.
Delaware Property Tax Rankings
Low property and vehicle taxes are among the reasons why Delaware can offer some of the top retirement communities for total quality of life, especially when you consider the prospects of long-term retirement.
Here is some additional tax information and rankings for Delaware that you may wish to know, courtesy of WallertHub:
·Real-Estate Property Tax Rank: 4th
·Real-Estate Tax on Median State House Value: $1,231
·Real-Estate Tax on Median U.S. House Value: $929
·Vehicle Property Tax Rank: 1st
·Vehicle Property Tax on Highest-Selling Car: $0
It may also interest you to know that Delaware supports a smaller number of government offices than other states and relies less on property taxes to fund public schools—two factors which are critical in enabling this overall lower tax exposure for residents. Some counties within Delaware offer even lower tax rates.
No Worry: Delaware Estate Tax
One subject that we may not have addressed previously is the Delaware estate tax. As you probably know the federal government has raised the estate tax to $5.45 million. But several states have their own estate taxes, and some also have inheritance taxes as well. Some states have both, including New Jersey and Maryland.
While Delaware has an estate tax, it is nearly equal to the federal estate tax level at $5.43 million. Again, this offers a significant advantage over other mid-Atlantic east coast states, which will make long-term financial planning easier and better for you and your family.