America's Property Tax Advisor

Delaware's Property Tax System is Unconstitutional


Major changes may be coming for Delaware property owners following a ruling that the state’s property tax system is unconstitutional.


The decision could eventually affect every property that is taxed in Delaware. The debate now begins on how to make the property tax system fair in the eyes of the courts.


Outdated Values


Vice Chancellor J. Travis Laster ruled that counties calculate tax bills with property values so outdated that some taxpayers get an unfair discount, while others pay taxes on a larger share of their property’s actual worth than they should.


Laster said in a 149-page opinion that by continuing to use the decades-old valuations when preparing assessment rolls, counties treat owners of similar properties differently.


This violates several state laws and most importantly violates the uniformity clause of the Delaware state constitution, which declares that “taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, except as otherwise permitted herein…”


The Remedy


Laster did not issue a remedy for the unequal tax treatment of Delaware properties. However, he ruled that the parties have 45 days to submit a schedule to govern the remedy phase.


“The effects of the pandemic likely will introduce additional and significant considerations for the remedial calculus, particularly regarding the timing of a remedy,” Laster wrote. Penalties for not paying property taxes are currently suspended because of the ongoing coronavirus.


One possible remedy could be a new statewide reassessment. The three counties in Delaware: Sussex, New Castle, and Kent last conducted property tax assessments in 1974, 1983, and most recently 1987.