House, Senate leaders formally announce property tax special session this month

The property tax bills in a state known for its low property taxes led to a flood of phone calls to House and Senate members as well as angry social media posts and one petition calling for a property tax freeze.

The situation was aggravated by rising school taxes and concerns that businesses received a tax windfall out of the recent reassessment process. The problems have been more acute in New Castle County, which had not undergone a reassessment in four decades.

The House and Senate leaders issued the following statement: 

 “Over the last two weeks, it has become clear that the reassessment process – despite its goal of promoting a fairer and more equitable tax system – has resulted in unexpected and significant financial strain for many Delawareans in parts of New Castle County.  In particular, we’ve seen a sharp and unforeseen shift in school tax burden from commercial to residential properties.

“Reassessment and tax implementation fall under the authority of our counties and school districts, and we were not made aware in advance of the degree to which residential tax bills would be impacted. We have since confirmed that the General Assembly can take immediate steps to ensure New Castle County residents do not face disproportionate tax swings compared to other parts of the state.

 “We want to be clear that the measures under consideration for this special session represent an initial response to the way reassessment has unfolded across Delaware. In conversations with county leaders, school districts, and stakeholders, we’ve worked to identify responsible, practical solutions that can deliver real relief for residents while making sure the measures we put in place are realistic and workable. While these proposals won’t address every kink in the reassessment process, they are a critical first step toward the broader reforms we know are needed to make sure future reassessments do not involve extreme swings or unfair tax burdens on Delawareans.

“First and foremost, we believe giving school districts the ability to set separate tax rates for residential and non-residential properties will help distribute the tax burden more fairly between residents and businesses.  Several districts in New Castle County have already requested this change as an immediate priority.

“Beyond that, we anticipate the following policies will also be considered during special session:

● Allowing eligible residents to enter into payment plans with no penalty or interest for school taxes.

● Decreasing New Castle County’s late payment fees for those not enrolled in or eligible for payment plans to 1%. The current structure includes a 5% penalty plus 1% monthly interest.

● Allowing New Castle County residents who successfully appeal their property values to be eligible for direct cash refunds if they have overpaid their tax bills.

“In addition to these immediate actions, the Legislature will also begin a deeper review of the reassessment process itself so that we can better understand how the New Castle County process led to a dramatic increase in so many residents’ school taxes and recommend additional changes to address any deficiencies and inequities in how the underlying value of properties are determined and the tax burden shared in all areas of Delaware.  We want that review to involve collaboration from all counties and school districts, and lead to legislation in early 2026 to take effect for the next tax year beginning July 1, 2026.

“As we get closer to the special session, we will continue to share updates and details with the public.”