The Delaware General Assembly has passed legislation that would make property tax reassessments a regularly occurring aspect of taxation in the First State.
Supporters say regularly occurring property tax reassessments are necessary to ensure property owners are paying taxes fairly based on the actual value of their property and to fix funding disparities among school districts, which receive significant funding from property taxes.
On Tuesday, the Delaware Senate quickly passed legislation to mandate the state’s three counties reassess the valuations used for property tax calculation every five years. The change is something that has been debated and failed to pass through the Delaware General Assembly for decades.
The bill now awaits the signature of Gov. John Carney. A spokesperson for the governor did not immediately indicate whether he will sign the legislation, which passed the Delaware Senate with 17 votes in favor, two against and two members absent.
Here’s a breakdown of why the issue is important and why this push is happening now:
So, what is reassessment?
An individual’s county, city and school tax bills are calculated using a tax rate that is local to the school district, city (if applicable) and county to where one’s property is located. That rate is the combined taxable value of that property to calculate one’s property tax bills.
Reassessment is the process of making that taxable value reflect something closer to the property’s actual market value, which fluctuates over time. County governments are responsible for conducting those valuations.
What would the new property tax legislation do?
House Bill 62 would force the counties to reassess property values used for tax calculations every five years so that those valuations more closely reflect the property’s “current fair market value.“
Why would you do that?
When property valuations are not updated, the value used to calculate tax bills drifts away from what the property is actually worth.
And that drift isn’t uniform. Over the years, different areas and different types of property appreciate value faster than others. If the values used for tax calculations are not updated, some people are paying bills calculated using values that are far departed from the actual value of the property.
More on that:A quick tour of Delaware’s unequal property tax system
Outside of Delaware, most governments regularly reassess taxes to maintain fairness in the taxing values.
Delaware’s three counties have not done so in decades, but are right now because a judge is making them.
Court case prompts reassessment
The current reassessment is occurring because of a court ruling that found the state’s outdated property tax valuations to be unconstitutional. There hadn’t been an update of those valuations since the ’70s in Sussex County and the ’80s in Kent and New Castle counties.
The ruling did not mandate regular reassessments however, which is why lawmakers have passed the legislation requiring reassessment every five years.
Reassessment already underway
Each of the state’s three counties is reassessing property values to current fair market value for the first time in decades. That includes going door to door to put eyes on each taxable property. Here’s a breakdown of relevant timelines for each of the three counties.
- New Castle County: Tentative valuation notices should go out in the fall of next year. These values will first be used to calculate new tax bills starting with the 2025 tax year.
- Kent County: Tentative valuation notices should go out later this fall. Tentative tax assessment rolls will be finalized in February 2024.
- Sussex County: Tentative valuation notices should go out in the fall of next year. New assessed values will go into effect in 2025.
The ongoing process includes a provision to allow appeals of reworked property tax assessments. Tyler Technologies is the contractor conducting reassessments and has set up websites for each county with pertinent information on the schedule for home-visit surveys, public meetings on the issue and other topics relevant to reassessment.
Kent County’s website can be found here. Sussex County’s is here. And New Castle County is here.
MORE:Property tax reassessment process extended in Sussex County because of staff shortages
Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com.
