Judge Upholds Property Tax Relief Law for Homeowners in Boost for Lawmakers

This year’s property tax adjustments in New Castle County are experiencing delays due to a pending lawsuit about tax rates. A recent ruling by a Delaware Chancery Court judge has confirmed lawmakers’ initiative to provide property tax relief specifically for homeowners. This decision is significant as it impacts all property tax bills in the state’s most populated county.

Key Ruling on Property Tax Relief Law

On October 30, a judge upheld emergency legislation passed in response to rising frustrations among homeowners regarding increasing tax bills. This legislation, known as House Bill 242, allows school boards to implement separate tax rates for residential and nonresidential properties.

• The legislation was a reaction to an extensive reassessment of property values, the first of its kind in decades.
• Residential properties now constitute 76% of the tax base, up from 66% prior to the reassessment.
• Nonresidential properties’ tax rates have been increased by 35% to 80% to offset financial pressure on residential homeowners.

Impact of the Lawsuit

The county planned to issue new tax bills before the November 30 payment deadline. However, a lawsuit challenging the split-rate system was filed, claiming these rates violated constitutional requirements for uniformity in taxation. The plaintiffs included landlords and lodging businesses, emphasizing the financial burden the tax rates imposed on them.

Judge’s Response to Legal Challenges

Vice Chancellor Lori Will rejected the plaintiffs’ claims, stating that different classifications within the tax base are permissible. She emphasized that lawmakers have the right to legislate tax structures in response to shifting burdens among property owners.

Key points from the ruling include:

• The separation of rates does not violate Delaware’s constitutional requirement for tax uniformity.
• Reapportioning the tax burden does not mandate a public referendum.
• Administrative errors in property classification do not constitute a systemic flaw in the assessment process.

Next Steps for Taxpayers

With the court’s backing for the split-rate tax structure, new bills will be issued, and payments are due by the end of November. However, the legislation only applies for this taxing season, suggesting that future increases may re-emerge unless addressed by lawmakers in 2026.

In the wake of this ruling, policymakers are continuing to review the property reassessment process to ensure fairness and clarity for all taxpayers.

Residents are encouraged to stay informed about their property classifications and understand their rights regarding tax assessments and challenges.