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Living in Delaware vs Pennsylvania: Taxes and Costs Compared (2026)

Buyers looking on both sides of the PA/DE line usually ask the same question: which side costs less? It depends on your income, where you work and the specific house. Here's how income, sales, property, transfer and vehicle taxes differ, with the official tools to check a real address.

A stone bridge over a creek on a country road in autumn

Short answer: Neither side of the line is cheaper for everyone. Pennsylvania taxes income at a flat 3.07%, adds a local earned income tax that depends on where you live, and charges a 6% sales tax. Delaware has a graduated income tax that tops out at 6.60% on income of $60,000 or more, and no state or local sales tax. Property taxes in both states are set locally, by the county, the municipality and the school district, so the right comparison is two specific houses, not two states. Transfer tax at closing is usually higher in New Castle County, DE than in Chester County, PA.

Last reviewed October 13, 2026. General information, not tax advice. Rates change every year; the official tools linked below give the current figure for a specific address.

How do state income taxes compare?

  • Pennsylvania: a flat 3.07% on taxable income.
  • Delaware: graduated rates from 2.2% to 5.55% on income under $60,000, and 6.60% on income of $60,000 or more.

Higher earners usually pay a lower state rate in Pennsylvania, but that's before local tax.

What is Pennsylvania's local earned income tax?

Pennsylvania also has a local earned income tax (EIT) on wages, collected for municipalities and school districts, and the rate depends on where you live and where you work. Your employer withholds the higher of your home's resident rate and your workplace's non-resident rate. Many workers also owe a Local Services Tax where they work. Look up any Pennsylvania address with the state's PSD code and EIT rate tool (Department of Community and Economic Development) before you compare.

In Delaware, the City of Wilmington levies its own wage tax on city residents and on non-residents who work in the city. That matters if your job is downtown.

What if I live in one state and work in the other?

Pennsylvania's reciprocal income tax agreements cover Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. Delaware isn't on the list. So:

  • Live in PA, work in DE: Delaware withholds its income tax, and you file a Delaware non-resident return. Delaware says non-residents may be able to claim a credit on their home-state return.
  • Live in DE, work in PA: your Pennsylvania employer withholds the work location's non-resident EIT and the Local Services Tax; your resident EIT rate is 0%.

A tax preparer can confirm how the credits work for your situation.

Does Delaware really have no sales tax?

Yes. Delaware's Division of Revenue says the state does not impose a state or local sales tax; it taxes businesses' gross receipts instead. Pennsylvania's sales tax is 6%, with a local 1% added in Allegheny County and 2% in Philadelphia. Food (other than ready-to-eat) and most clothing are exempt.

How do property taxes work in Chester County, PA?

Your bill is your assessment × millage, with separate rates for the county, your municipality and your school district. One mill is $1 per $1,000 of assessed value. For 2026, Chester County's rate is 5.164 mills, and the county's published chart shows these combined rates (county 2026, municipality 2026, school 2026-27):

MunicipalitySchool districtTotal mills
Kennett Square BoroughKennett Consolidated53.1676
Kennett TownshipKennett Consolidated45.0676
New Garden TownshipKennett Consolidated44.6376
London Britain TownshipAvon Grove48.8290

Two things trip buyers up:

  • The assessment isn't today's price. Chester County assessments represent full market value as of the base year, built on a countywide reassessment effective for 1998. Don't multiply millage by a purchase price; look up the property's assessment in the county's Records Search.
  • The homestead exclusion. Owner-occupants can apply to the county Assessment Office for school tax relief; applications run December 15 through March 1.

How do property taxes work in New Castle County, DE?

After New Castle County's reassessment, every property is assessed at its fair market value as of July 1, 2024, and that assessment sets both your county bill and your school district bill. The county's rate is applied per $100 of assessed value, and each school district sets its own rate. The county's FY2027 budget (which began July 1, 2026) raised the property tax rate for unincorporated New Castle County by 17.2%. Ask for the seller's current tax bill and check the property on the county's parcel search, linked from its Assessment page.

What about realty transfer tax?

In most of Chester County, transfer tax totals about 2% (1% state plus a local tax commonly 1%), customarily split between buyer and seller. In New Castle County it totals 4% (2.5% state plus 1.5% county or city), typically split equally, with a first-time buyer break on the state share. The details are in Realty Transfer Tax in PA, DE and MD.

Do car costs differ?

When you buy a vehicle, Pennsylvania charges 6% sales tax on the purchase price or current market value. Delaware has no sales tax but charges a document fee when a vehicle is titled, which rose from 4.25% to 5.25% on October 1, 2025.

So which side costs less?

It depends on your income, where you work, how you shop and, above all, the specific house. Run the numbers on real addresses: the EIT lookup and the county assessment for a Pennsylvania home, and the assessed value and current bill for a Delaware one.

Talk it through with us

I'm Brian Foraker, owner of Foraker Realty Co. Our headquarters at 135 E State St in Kennett Square is a short drive from the Delaware line, and we're licensed in both states, so one agent can follow your search across it. Start on our buying page, browse listings at forakerrealty.com, or call (484) 406-3004.

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