March 23, 2009
PROPERTY TAX
ISSUE BRIEF


ISSUE:    Property taxes are one of the fundamental revenue sources for public schools and municipal and county governments in Delaware.

BACKGROUND:    Delaware benefits from being one of the lowest property taxes in the tri-state region. As a result, we have experienced tax refugees coming to Delaware to retire and simply escape the burdensome property taxes in their home states. The General Assembly does not typically deal with property taxes because they are an instrument of local government and are dealt with through the rate structures established by municipal and county governments and the school districts.

DAR POLICY:    DAR remains neutral on property taxes. While we do not typically endorse increasing any tax burdens upon homeowners, property taxes are one of the broadest taxes and typically are the most equitable that can be levied by a government. Because we do advocate for a general reassessment, some property owners will see their taxes increase due to the increased assessment of their property.

IMPACT:    Property taxes can be a direct influence on the ability of a purchaser to buy a home. The higher the property taxes, the higher the housing cost and the more money necessary by the buyer to purchase and live in a home. While our current property tax rates are significantly less than in surrounding states, there seems to be little political will to raise property taxes. Therefore, municipal and county government will seek other taxes, i.e. fees, business licensing, hook-up fees and other user fees to fund government. Many of these fees are paid by the new property purchaser or resident to the state.

STATUS:    There is no pending legislation. DAR has not seen any property tax legislation for many years.