By: Mitch Wilson – Senior Manager of Property Tax
06/30/23 UPDATE: House Bill 62 was passed on 06/20/23 at the Delaware General Assembly to ammend Title 9 of the Delaware code relating to the assessment of residential and commercial real estate. This act requires properties to be assessed at least once every 5 years moving forward. The first of the 5-year periods beginnning with completion of the upcoming reassessments, with the goal of maintaining present fair market value statewide. Read more here.
AUGUST 2022 UPDATE: All three major counties in Delaware, New Castle, Kent and Sussex, have rescheduled their reassessments with either 2023 or 2024 valuation dates. Kent and Sussex counties will be reassessed first with a valuation date from Tyler Technologies of 07/01/2023, and a finalized reassessment by Tax Year 2024. The now presumed target date for New Castle County reassessed values is 07/01/2024 and finalized reassessment in effect by Tax Year 2025. Statewide, Delaware commercial property owners will still be given a 3-month window to initiate an informal reassessed value appeal with Tyler Technologies, likely due 10 days prior to final informal value notification. It is also highly likely that subsequent board appeal deadlines in each county’s reassessment year will be pushed depending when reassessment notices are issued.
There is word that the State is in the process of drafting legislation requiring automatic reassessments for each county every five years, but no official announcement from Delaware State or County officials has been made regarding the matter. At this time, there is no current law in Delaware requiring regular reassessments, but County officials are hoping the proposed legislation becomes law to avoid the inevitable massive valuation and resulting taxation increases commercial property owners will be seeing in the next 18 months.
July 7, 2022– In the coming months, all three counties in the state of Delaware are set to finalize their first property value reassessment in decades. Third-party appraisal services firm, Tyler Technologies, has completed its data collection for the counties of New Castle (last reassessment in 1983), Kent (1987), and Sussex (1974), with the estimated release of values sometime late-Fall 2022.
While Delaware publishes sales study ratios for school funding apportionment purposes, the State Courts have upheld County practices of not applying these ratios to arrive at an implied market value for the current tax year over the last few decades. Instead, the practice remains that property owners and investors had to trend value indications from current year back to the original decades-old reassessment date. Last year, Delaware Courts finally overturned the previous set-precedent, making way for a statewide revaluation that will impact 2023 property values. Huge changes for the whole state that were a long time coming, including massive increases to fair market value and subsequently, property taxes.
Delaware commercial property owners should brace themselves for drastic value increases in all three counties. With an abundance of nationwide changes in the commercial real estate landscape, particularly in a post-pandemic era, there is no question that commercial real estate values will be a focus for inflation in an effort to rebuild lost revenue. While values will increase across the board, we are expecting the hardest hit sectors are expected to be multifamily and industrial, as indicated by nationwide trends, while hospitality should be slightly cushioned due to COVID vacancies and economic downturn. These themes, paired with decades of catching up to do, will be a likely cause for bottom-line-threatening value notices for Delaware commercial property owners statewide.
The new Delaware property values will be in place for the 2023 tax year and the opportunity to informally appeal the reassessments will take place late-2022 and into January 2023. With Tyler Technologies’ use of a Computer Mass Appraisal System (CAMA), Invoke recommends a highly personal and detailed approach to protesting the property value increases in Delaware. Our team of Delaware property tax professionals, led by Mitch Wilson, has decades of experience navigating the complex nuances of reassessments, and specializes in securing maximum tax savings for complex commercial real estate. Our approach is personal, hands-on, effective, and has proven to help our clients save millions of dollars in value assessments and property tax refunds year-after-year. To establish a proactive approach to your Delaware reassessment value, contact our Delaware property tax team today: