We’re going to begin with the advantage to living in Delaware that the majority of people talk about,
and that’s the low tax burden that Delawareans enjoy.
There’s a lot to unpack when it comes to the many tax benefits to living in the First State, but the one
that immediately comes to most people’s minds is that Delaware is one of only five states in the
country that charges no sales tax on purchases. It’s also the only state in the mid-Atlantic that can make
This fact is one of the reason’s why both the American Association of Retired Persons (AARP) and
Kiplinger’s have named Delaware as the most tax-friendly state for retirees.
But it gets better! Not only does Delaware offer tax-free shopping, but there are many other tax
advantages to living in this Small Wonder of a state.
Low State Taxes
Delaware income tax rates generally range between 2 percent and 6.5 percent, depending on your
specific situation. Either way, it remains one of the lowest in the country and allows residents to keep
more of their hard-earned cash for other purposes.
Tax Exempt Retirement Income
Many people move to Delaware in their retirement for the taxes and the ability to stretch their dollars
further in their golden years. Indeed, this is why so many new communities have popped up over the
last couple of decades that are designed exclusively for the 55 and over demographic.
Here’s what you need to know if you’re moving to Delaware in retirement:
- Social Security benefits are not taxed in Delaware.
- Delaware has no inheritance tax, so your heirs can keep what you leave for them.
- The first $12,500 of retirement income every year is tax exempt if you’re above the age of 60.
Low Property Taxes
This could change a little by 2025 due to property values being reassessed throughout the state. But
while this is almost certain to have an effect, we think it will be a fairly minimal one.
As of 2021, Delaware is still among the cheapest states in the country when it comes to property taxes.
This is especially true in the southern areas of the states, where property values haven’t been reassessed
since the early 1970s.
As mentioned, all three counties in Delaware are currently undergoing reassessment projects and we’re
not entirely sure how it’s going to play out in the end. But we feel confident the First State will still
feature some of the lowest property taxes in the country when all is said and done.
No Personal Property Taxes
Some states in the mid-Atlantic and around the country impose personal property taxes – Delaware
So you can buy that boat or that recreational vehicle and not have to shell out extra dollars in personal
property taxes every year.