Free Delaware Gift Bill of Sale
Delaware has no state sales tax — making vehicle gifts entirely free of traditional sales tax — but the state still levies a 5.25% document fee on the vehicle's fair market value at the time of title transfer, even when the stated price is "GIFT." On a $20,000 car, expect to pay $1,050 in document fees. The good news is that processing is straightforward: no emissions test, no safety inspection, and a title application that Delaware expects immediately and no later than 30 days after the transfer at a DE DMV office.
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Delaware Gift Bill of Sale — What You Need to Know
Sales Tax Details
Delaware has no state sales tax, but charges a 5.25% document fee on fair market value at title transfer, even for gifts. On a $20,000 vehicle, the document fee is $1,050 regardless of the gift status.
Exemption: No sales tax in Delaware, but 5.25% document fee applies to FMV regardless of gift status
Inspection Requirements
Delaware does not require a safety or emissions inspection for vehicle title transfers or registration renewals. This applies to gifted vehicles as well.
Delaware Gift Sale — Step-by-Step Checklist
- Sign the back of the existing Delaware title over to the recipient, writing "GIFT" in the purchase price / consideration field.
- Prepare a bill of sale listing the donor's and recipient's full legal names, vehicle year/make/model/VIN, the gift date, and "GIFT" as the stated consideration.
- Look up the vehicle's NADA average trade-in value beforehand so the recipient is prepared to pay the 5.25% document fee based on that value — not $0.
- Both donor and recipient bring valid government-issued photo ID to the DE DMV office.
- Submit the signed title, bill of sale, completed title application, and payment for the 5.25% document fee plus the standard title fee to a DE DMV office.
- The recipient must obtain new Delaware registration and license plates in their name.
- Complete the transfer within 30 days of the gift date to avoid late title transfer penalties.
Common Pitfalls
- Expecting to pay zero fees because there is no sales tax — Delaware's 5.25% document fee on FMV means a $20,000 gift still costs $1,050 at the DMV counter; budget for this in advance.
- Trying to negotiate the document fee down by understating the vehicle's value — the DE DMV assesses the fee on book value regardless of the stated consideration, and providing an inaccurate value can delay processing.
- Missing the 30-day title transfer deadline, which results in late fees and leaves the vehicle legally titled in the donor's name.
- Forgetting to update insurance before the recipient drives the vehicle — the document fee must be paid and title transfer completed before Delaware considers the recipient the legal owner.
- Not bringing both parties' IDs or proof of insurance to the DE DMV, causing the appointment to be rescheduled.
Pro Tip
Despite having no sales tax, budgeting for Delaware's 5.25% document fee on the vehicle's NADA average trade-in value is essential for anyone planning a vehicle gift in the state.