Delaware has one of the lowest property tax rates in the nation. In 2018, the average effective property tax rate for Delaware residents is 0.55%. There are multiple factors that explain this low rate, such as the state’s policy on reassessing property values and the benefits it receives by treating corporations favorably. Based on the state’s current structure, Delaware does not rely on property tax collections as a main revenue stream.

Average Property Taxes

Delaware’s average effective property tax rate of 0.55% in 2018 is the fourth lowest in the country. An average property tax payment in Delaware represents 1.6% of an individual’s annual income. This ratio is the eighth-lowest ratio in the country. The median property tax payment made in Delaware is the 13th lowest, at $1,078.

Property Taxes by County

The lowest property taxes in Delaware as of 2018 are found in Sussex County. The median annual property tax payment in Sussex County is $662 (0.27% of home value). Also for this time period, Kent County has a median property tax payment of $833. Finally, New Castle has the highest property tax rate at 0.55%, and highest median property tax payment in the state at $1,385.

Neighboring States

All of Delaware’s three neighboring states assess higher property taxes than Delaware. Maryland in 2018 has an average effective property tax rate is 0.87%. This is the 25th highest rate of the 50 states. Pennsylvania’s average effective property tax rate of 1.35% is the 13th highest in the country when excluding the District of Columbia. New Jersey in 2018 has a 1.89% rate, the highest in the country.

Property Value Reassessment Policy

Delaware’s property taxes are assessed by the county, not the state. One factor behind this is Delaware's somewhat unusual policy of basing property taxes on the property value calculated during the last reassessment year. As of 2018, the reassessment year for Kent County is 1987, New Castle is 1983 and Sussex County is 1974. Any additions or upgrades made to property are reassessed to determine what the property’s value was in the last reassessment year. This is one indicator of why Delaware’s property taxes are so low – they are based on outdated value assessments and are being calculated using deflated dollar values.

Other Tax Collections

Delaware’s personal income tax progresses to a top bracket of 6.6% of an individual’s wages. This top bracket applies to taxable income over $60,000. Personal income taxes are the highest source of revenue for the state, as collections often top $1 billion, including $1.14 billion of collections in 2014. After winnings are deducted, Delaware collects 43 cents from every dollar played at casinos. In 2013, this resulted in collections of over $235 million. Finally, Delaware also has a gross receipts tax that may be assessed at a rate higher than 2%, depending on the good being sold. Because Delaware receives revenue support from citizens in other ways, property taxes are not as relied upon for receiving funding.

Benefits From Corporations

As of 2017, Delaware is home to more than 60% of the nation's Fortune 500 companies, and it is also the state with the most corporations. This is due to favorable legislation regarding the establishment and operation of a business incorporated in the state. This results in unique revenue streams for Delaware. For example, the state collects corporate franchise fees – sometimes upwards of $180,000 from a single corporation – so the entity may continue enjoying favorable Delaware taxes. In addition, all abandoned property from businesses incorporated in Delaware flow to the state. Therefore, while Delaware has low property tax collections when compared to other states, it has other revenue streams to compensate for that.

Georgia Property Tax Guide

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