On Tuesday, August 12th, the Delaware General Assembly held a one-day special session to propose legislation to address resident concerns with the required reassessment. Below is a brief overview of the six bills and one resolution. Each bill, except Senate Bill No. 202, were immediately signed into law by Governor Meyer. Links to the full text of each bill are also included.
- House Bill No. 240:
- If a taxpayer receives a favorable result from their assessment appeal and overpaid their taxes by more than $50.00, the County will be required to refund the taxpayer the overpayment amount. If the overpayment is under $50.00, the County may elect to either refund or apply the amount as a credit against future taxes due.
- House Bill No. 241:
- Eliminates the initial penalty of 5% if taxes are not paid by the due date, which had only been due in New Castle County.
- If taxes are not paid by the due date, taxpayers will be assessed a penalty of 1% per month until taxes are paid.
- Residential taxpayers whose bill has increased by $300.00 or more from the previous billing cycle may enter a payment plan (at minimum 3 equal installment payments), during which time penalties will be waived and New Castle County cannot collect taxes owed or take any legal action against the residential property owner, with respect to only the 2025-26 taxes.
- House Bill No. 242:
- Allows school districts entirely in New Castle County the ability, within 10 business days of enactment (by August 26, 2025), to reset their tax rates for the 2025/2026 tax year and to reissue a tax warrant to New Castle County using different tax rates for residential and non-residential property.
- non-residential rate must be equal to or greater than the residential rate, but cannot be more than 2 times the residential rate
- the school district’s total projected revenue cannot increase due to this rate split
- Upon receipt of new rates, New Castle County must supplement any 2025-2026 tax bill already issued for taxpayers in that district with an extended deadline for payment of November 30, 2025 for tax bills that change.
- Importantly, the deadline to pay 2025-2026 property taxes remains September 30th, unless the property’s tax bill changes as a result of this legislation, in which case, the payment deadline is extended to November 30th.
- Allows school districts entirely in New Castle County the ability, within 10 business days of enactment (by August 26, 2025), to reset their tax rates for the 2025/2026 tax year and to reissue a tax warrant to New Castle County using different tax rates for residential and non-residential property.
- Senate Bill No. 203:
- Codifies longstanding common law, expressly allowing counties to set different property tax rates by property class.
- Senate Bill No. 204:
- Codifies longstanding common law, expressly allowing municipalities to establish different tax rates for residential and non-residential real property.
- Senate Substitute No. 1 for Senate Bill No. 202 (Not Signed by Governer Meyer):
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- Requires New Castle County to prepare and submit quarterly reports to state lawmakers through the end of 2027.
- Report must include information detailing the number of parcels in payment plans, status of parcels in appeal process, property sales and property tax revenue collected and distributed for each school district and lien data.
- Senate Concurrent Resolution No. 122:
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- Calls for an immediate review of the recent statewide property reassessment by members of the General Assembly, in collaboration with state, local, and school district officials, to develop legislative and operational measures that ensure future reassessments are conducted fairly, transparently, and equitably.
While no formal announcements have been made, it is currently our understanding that all school districts entirely in New Castle County will elect to split their tax rates between residential and non-residential properties; however, we do not yet have any clear indication of how the school districts plan to determine these new split tax rates beyond the limitations provided in this legislation.
Critically, we expect this legislation will cause an INCREASE in 2025-2026 property taxes for ALL non-residential property owners in school districts entirely in New Castle County compared to the tax bill they already received earlier in the year, with some extremely limited exceptions.
If you are a non-residential property owner in a school district entirely in New Castle County, the only real questions are: (1) how much did this legislation increase my current tax bill? (2) how does this impact my options for paying my tax bill? (3) what are my options to potentially lower my tax bill for next tax year (2026-2027) and beyond?
In terms of the actual increases for the current tax year (2025-2026), we should learn more between now and the August 26th deadline for school districts to send their new tax warrants to New Castle County. Fred Mitsdarfer and other members of the Tarabicos Grosso Team are monitoring this situation very closely, and will continue to keep you updated as the school districts communicate their decisions to the County.
In terms of impacting payment, we currently expect all school districts entirely in New Castle County to utilize this legislation, causing widespread changes to tax bills across New Castle County and the eventual extension of the payment deadline for those impacted to November 30th. However, nothing has been formally confirmed at this point, so the deadline to pay 2025-2026 property taxes currently remains September 30th. Given the new legislation requiring New Castle County to refund material overpayments following successful assessment appeals and the removal of the initial 5% penalty for late payments, we expect most clients with active assessment appeals to either pay the taxes due on the portion of the property’s assessed value that they do not dispute or pay the taxes in full on the property’s entire assessed value, depending on which option works best for them. That said, we strongly recommend that clients wait until closer to the September 30th deadline to make a payment under either option, as New Castle County should hopefully issue supplemental tax bills in early September.
In terms of potentially lower your tax bill, we strongly recommend exploring if you have a good case for a property assessment appeal, because reducing the assessed value of your property is one clear way to reduce your tax burden. While the deadline to challenge a property’s 2025-2026 assessed value lapsed several months ago, it is not too late to lower your tax bill for next year (2026-2027) and beyond. Importantly, we are again anticipating a substantial number of property assessment appeals to be filed for next year in all three counties, but especially in New Castle County which received over 5,200 appeals this year. However, given the extensive backlog of assessment appeals in New Castle County currently still waiting to be reviewed and scheduled for a formal hearing, it appears likely that a material number of those formal hearings will be conducted in 2026. In short, if you have a good case to pursue a property assessment appeal, it could be beneficial to begin the process now, so you can file sooner rather than later.
Do not hesitate to reach out if you have any questions or if you want to discuss your potential assessment appeal options. Fred Mitsdarfer and other members of the Tarabicos Grosso Team are happy to help guide you through that process.
Fred Mitsdarfer at (302) 757-7800 and Frederick@tarabicosgrosso.com.