In light of property value reassessments happening across the state for the first time in decades, letters sent to residents have incited panic and confusion about the future of their property values, and in turn, their tax bills.
The good news is that sticker shock will fade as the process continues, but the system is very much changing in significant ways.
Here’s what to know about Delaware property reassessment.
What is reassessment?
A property reassessment happens in most states on a regular basis to determine the market value of homes in a county and to set property tax rates accordingly.
Assessors comb the county to review the exterior of your home and compare what’s known about it via public records (i.e. total square footage, acreage, bedrooms, bathrooms, etc.) to a handful of comparable home sales in the immediate area.
Residents are notified of either an increased or decreased property value, which along with a new tax rate will determine their new tax bill.
Why are we doing this now?
Delaware was one of the last states in the country to not require periodic reassessments of property.
Both New Castle and Kent counties haven’t done reassessments since the 1980s, and Sussex County hasn’t done one since 1974.
It led to a complicated and antiquated system of determining a newly built home’s value as if it was built in the ‘80s.
But a 2018 lawsuit by Delawareans for Educational Opportunity and the NAACP of Delaware argued that the lack of periodic reassessments had systematically violated the rights of taxpayers by essentially discounting the tax burden of weather homeowners. In 2020, the Court of Chancery agreed and ordered that all properties should be assessed.
The advocates had also argued that the lack of reassessments exacerbated the educational inequality by creating stagnant assessed value in the county.
Will this be a one time thing?
No.
With the passage of House Bill 62 last year, reassessments are now required in each county every five (5) years to ensure that the taxable base keeps pace with the market.
Did this just start?
All three of Delaware’s counties have prepared for sweeping reassessments of county properties since 2021. Kent County mailed out its reassessment notices late last year, finalized its reassessment this summer, and set a new county tax rate.
Sussex and New Castle counties are in the process of sending out reassessment notices and will set new county rates in the coming year.
What will it do to my taxes?
The exact total impact that reassessment will have on taxes in New Castle and Sussex counties is unclear at the moment, as new tax rates won’t be established until the spring.
However, each county has promised that the process would be “revenue neutral,” meaning the county will match its current revenue stream by adjusting down its tax rate.
For example, Kent County has changed its tax rate from 36 cents per $100 assessed value to 5.72 cents per hundred for the coming tax year after its reassessment.
While the counties have promised to hold the reassessments revenue neutral, state law does allow them to raise up to 15% in new revenue through the reassessment process. School districts are also allowed to raise up to 10% in new revenue through the reassessment on top of that sum.
Should one or both choose to raise its rate, your bill would increase.
What about future tax years?
In order to raise your taxes in future years, a county would have to approve a tax rate increase through a public vote. A school district could also increase its rate through a referendum vote.
Your assessed value and tax rate will also change every five years, making this process a more common occurrence.
Should I be concerned about an increased assessment?
The reality is that about a third of residents will see lower taxes in an reassessment, a third will see higher taxes and a third will stay about the same. You will have a general idea of your burden by how it compares to the average assessed value change of your county.
In New Castle County, that is 511%. If your assessed value change is less than that, then your tax bill will likely drop.
But getting a massive spike in property value does not raise a resident’s taxes proportionately, meaning a resident who saw a 600% increase in value will not see that amount in tax increases.
Are my exemptions counted in the assessment?
No.
Exemptions for veterans, farmland, the disabled, the elderly, etc., and all tax abatements are now reflected in the new assessed values. They would be applied on top of your next tax bill once a rate is set.
How can I appeal my reassessment?
Residents dissatisfied with their reassessed home value are able to appeal.
There are two avenues to going through an appeal. The first is presenting an informal one to the consulting firm, Tyler Technologies, that is contracted to complete the reassessments statewide. Residents looking to go this route, should bring information about the price of surrounding properties on real estate websites.
If unsatisfied with the result of that informal meeting, residents can appeal their tax assessments through their respective county.
Here are the websites for each county’s reassessment office:
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