DOVER- On Thursday, lawmakers introduced legislation aimed at addressing immediate concerns arising from the recent property tax reassessments.
This was the first reassessment for New Castle County residents since 1983, Kent County residents since 1987, and Sussex County residents since 1974. The process resulted in a significantly increased tax burden for many property owners, particularly in New Castle County. Some residents saw their property values increase by over 500%, translating to hundreds or even thousands of dollars in additional property taxes each year.
The initial reassessments were prompted by a lawsuit that challenged the state and counties over inequities in school funding.
Determining that immediate action was needed to help alleviate the new financial burden on residents, House and Senate leadership worked with their colleagues to develop solutions to provide immediate relief to residents, knowing that long-term reform would still be needed.
“While I fully acknowledge and respect the fact that the reassessment process was intended to create a fairer and more equitable funding structure, it has caused serious and unexpected financial strains for many Delawareans,” said Speaker Melissa Minor-Brown.
“We must act now. The measures we intend to take up during our upcoming special session are the first response to a complex problem that impacts all three counties. They won’t solve everything, but they will help residents keep their heads above water as we determine the best path forward to address the deeper issues that put us in the situation we find ourselves in now. When we return to Legislative Hall in January, my colleagues and I will continue our efforts to reform the reassessment process and bring fairness to every resident.”
HB 242, sponsored by Rep. Kimberly Williams and Sen. Jack Walsh, specifically addresses school district tax rates. This legislation would give any school district located in New Castle County the ability to reset its tax rates for the 2025-2026 tax year, and reissue a tax warrant using different tax rates for residential and non-residential property.
The non-residential tax rate must be at least equal to the residential tax rate, and may not be more than two times the residential tax rate. Additionally, the total amount of revenue projected to be collected through use of the residential and non-residential tax rates may not exceed the total amount of revenue the district was projected to collect under its original tax warrant.
This follows widespread reports that non-residential properties were underassessed, while residential properties were overassessed. The amount that one pays in school taxes is directly tied to the assessed value of their home. The average New Castle County resident saw their assessed home values rise by 433% – sometimes leading to assessed values increasing by hundreds of thousands of dollars.
Despite commercial/non-residential property values going down or rising at a much lower rate, they are being taxed under the same school tax rate as residential properties.
“During the last few weeks, myself along with several of my colleagues have been working on a range of measures both short and long-term to assist with the tax burden that has been placed on residents throughout this reassessment. We did not anticipate these widespread increases and have been alarmed by what has occurred to our constituents’ property taxes throughout this property reassessment process,” said Rep. Kim Williams.
“HB 242 will allow school districts to reset and set new tax rates for residential and non-residential ‘commercial’ properties. This will provide districts with an immediate capability to adjust their residential tax rates to offset some of the tax burden to non-residential properties for this year’s taxes, while we work on a longer term resolution.
“These pieces of legislation are the first step, and I look forward to continuing working with my colleagues to assist our constituents on this issue when we return in January.”
School districts have 10 business days from the enactment of HB 242 to reset their rates and issue new tax warrants to New Castle County. Once received, New Castle County must void any tax bill already issued for taxpayers in that district and reissue tax bills with an extended deadline for payment of October 30, 2025. For any taxpayer who submits payment under the original tax bill and whose total school tax liability is adjusted downward, New Castle County will issue a refund of the difference.
If a school district that resets its rates in accordance with HB 242 experiences a cash flow shortfall of local school funds due to the extension of the deadline for FY26 tax payments, they may request to borrow from future allocations of their State-share education funds.
New Castle County residents were offered the opportunity to appeal their assessed property value, and over 5,000 residents are still awaiting an answer.
In July, the county released a statement saying that the completion of the appeals process is expected to take several months. Property taxes are due on September 30, 2025.
HB 240, also sponsored by Rep. Kim Williams and Sen. Jack Walsh, would allow residents who successfully appeal their property values to be eligible for direct cash refunds if they have overpaid on their tax bills by $50 or more.
If the overpayment is less than $50, a county may elect to refund or credit the amount against future taxes due.
Amounts in school taxes determined to have been overpaid by a residential taxpayer after an assessment appeal will be refunded by the county following the same rule.
“In tandem, House Bills 240 and 242 work to put money back in the hands of families in need of relief,” said Sen. Jack Walsh.
“We share in the frustration of hardworking Delawareans who are struggling to keep up with rising costs, and we remain committed to making Delaware more affordable for everyone who calls the First State home.”
Finally, HB 241, sponsored by Rep. Nnamdi Chukwuocha and Sen. Spiros Mantzavinos, requires that, during the first tax year following a general reassessment, a payment plan be made available to residential taxpayers whose tax bill increases by $300 or more over the prior year.
This plan must be made up of at least 3 equal installments, and cannot include any late fees, interest, or penalties, so long as the taxpayer is compliant.
“I understand the purpose behind property tax reassessments. And while I am glad that we in New Castle County finally underwent one for the first time in several decades, I am appalled by the crushing burden it has placed on far too many taxpayers,” said Rep. Nnamdi Chukwuocha.
“Delawareans across the state are struggling to make ends meet, and having hundreds or even thousands of dollars added to their tax bills does not help. Allowing taxpayers to utilize a payment plan is the least we can do to help them stay afloat as we search for long-term solutions to address our state’s funding formula.”
HB 241 also reduces late payment penalties for school taxes in New Castle County to 1% per month for those not enrolled in payment plans, which is the current penalty for late payment in Kent and Sussex.
“An overwhelming number of Delaware families have been blindsided by the recent spike in their property tax reassessments,” said Sen. Spiros Mantzavinos.
“As the cost of living continues to rise, House Bill 241 is a compassionate response that aims to ease this financial burden, allowing taxpayers to pay off their bill over time and avoid late penalties.”
Together, these bills aim to provide short-term relief to impacted residents by addressing systemic issues within the reassessment and taxation processes. However, they are not long-term solutions.
HB 240, HB 241, and HB 242 will be discussed during special session on August 12, 2025. Lawmakers will explore long-term solutions to the school funding system, reassessment process, and future reassessment guardrails when they reconvene for regular legislative session in January 2026.
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