Real Estate Update: Kent County Agrees to Complete General Reassessment of Real Property in Time for Fiscal Year 2025 Property Tax Bills

February 25, 2021

Publication| Real Estate Services

In a further development of the In re Delaware Public Schools Litigation, C.A. No. CV 2018-0029-VCL (County Track), on February 24, 2021, the Delaware Court of Chancery granted a Stipulation and Order requiring that Kent County complete a general reassessment of all real property in the county and that such reassessed values be placed on the assessment roll used to issue property tax bills in fiscal year 2025 (i.e., July 1, 2024).  Every property in Kent County will be evaluated by assessors who will update each property’s value under current real estate market conditions.  This process will likely result in a large number of assessment appeals from property owners across Kent County.  As with the Stipulation and Order pertaining to New Castle County, this Stipulation and Order only requires a single reassessment of the property, and does not provide any obligation to or framework for Kent County to conduct future reassessments.  During this process, the defendant, Susan Durham, Director of Finance for Kent County, must provide quarterly written progress reports on the reassessment to the plaintiffs, Delawareans for Educational Opportunity and NAACP Delaware Conference of Branches.

If Kent County exercises best efforts to complete the reassessment by the July 1, 2024 deadline but fails to do so for reasons beyond its control, Ms. Durham may seek an extension.  However, if Kent County fails to undertake good faith efforts to complete the general reassessment by the deadline, the plaintiffs can bring an expedited proceeding before the Delaware Court of Chancery.

Importantly, after this Stipulation and Order regarding Kent County and a similar Stipulation and Order regarding New Castle County, Sussex County is the only county that has not agreed to a Stipulation and Order regarding the remedy portion of the litigation, which is scheduled for hearing on March 29 and 30, 2021.

Regarding New Castle County’s agreement to conduct a reassessment of real property, on February 23, 2021, the New Castle County Council took steps toward funding its reassessment by introducing ordinance number 21-104.  This ordinance would allocate $26,640,000 from the General Fund Tax Stabilization Reserve Account to the General Fund Reassessment Reserve Account, which is an account to specifically fund New Castle County’s reassessment effort.  The reassessment is expected to cost between $13.3 million and $26.4 million.  A vote on the legislation is expected in the coming weeks.

The council also unanimously passed a resolution stating that the property tax reassessment should occur every five years, and thus the current reassessment should be conducted in a manner that creates the technological infrastructure to support recurring reassessments.  The resolution also stated that the reassessment should not provide additional money to the county but should instead be revenue neutral.  Finally, the resolution mentioned outreach to communities that may lack resources to determine the impact the reassessment may have on them. Bids for conducting the reassessment will soon be due to New Castle County.

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