“There are more costs than property taxes and sales taxes; other costs are important and healthcare is a priority.”
I couldn’t have said it better myself and I often do remind our buyer clients that “lower taxes alone are not a good enough reason to relocate at our age”.
I am not originally from Delaware and I have lived in many different parts of the country during my long adult life. Without getting too technical, I have impressions of whether each place I lived was expensive or not so much. Some of it has to do with when I lived there and what my expectations were.
I was fortunate to live in New York City in the late 60s and early 70s when it was possible to share an apartment in a good neighborhood with one roommate on a secretary’s salary. By the late 70s, I was living in Boston and ready to become a homeowner, but you may remember how high the interest rates were back then. So, even though I was doing OK, I was not able to qualify for a mortgage at those rates. It didn’t even matter what the property taxes were or whether there could have been an income tax deduction; I could not get ahead of the cost to qualify and purchase. In Boston, I also remember that my auto insurance was the highest of anywhere I had lived.
In 1983, I found myself with a great job in Houston, Texas. Interest rates were still quite high but home prices were much lower than Boston. So, with an assumable mortgage, I was finally able to purchase my first home. Then the oil market crashed just before I was transferred to the DC Metropolitan area in 1986. The headline tells the story – “In late 1985, Saudi Arabia abandoned its strategy of propping up prices, and instead began increasing production in order to increase market share. By July 1986, the average per-barrel free on board (FOB) price for OPEC crude oil had dropped to $9.85 from $23.29 in December 1985, a 58% decline in a matter of months.” I was living in a neighborhood full of mid-level managers at companies like Exxon, and one by one they all left. That loss I took on the sale of that home hurt my pocket a lot but I was back on the East Coast and able to purchase a small condo in Northern Virginia.
It’s different now in retirement
Getting back to the question of the overall cost of living, I find the impact of property taxes, sales tax, and other costs of living much more important to me today than it was when I was working in Corporate America. Where and how I lived then depended on my career and the opportunities presented to me. I am not retired yet, but for many of our clients that have had one or two careers while also raising a family, it is likewise very different now. When approaching retirement, everything adds up. Depending on where you are coming from, I can honestly say that Delaware is one of the most affordable places I have lived. There are many things to do here that are a lot less expensive and others that are about the same. My taste in fine dining vs. chain restaurants, and boutiques vs. big box shopping, for example, is about the same except for the major cities like NY or Boston.
The Facts on Delaware Property Taxes
All real property in the state is subject to tax unless specifically exempt. Personal property, tangible and intangible property is exempt. Real estate is subject to county, school district, vocational school district and municipal property taxes. The state offers various property tax relief programs for residents age 65 and older and for residents with disabilities. Homeowners 65 and older can get a credit equal to half of the school property taxes, up to $400. For information on the senior school property tax credit, click here. For property tax rates, click here.
Excerpt from Retirement Living Information Center
Many states do tax some personal property; I have lived in a few including Texas and Virginia.
Let’s not forget Healthcare
Looking beyond low property taxes, what is available for healthcare is especially important in your retirement years. We have written about Delaware healthcare options many times before and we will be covering it more. The expansion of healthcare options, especially in Southern Delaware, is very exciting. The brand new BayHealth Hospital under construction in Milford, Delaware, will be a game changer. While Baby Boomers make up our largest group of buyer clients, clients from the medical profession are growing every year.
Read more of our frequently asked Delaware tax questions right here. And if you have further questions about taxes, cost of living, and retiring to Delaware, we are happy to help you! Just give us a call at 302-424-1890 or Contact Us Here.