DELAWARE - Gov. Matt Meyer will allow legislation that creates multiple property tax rates in Delaware school districts to become law without his signature.
House Bill 462 permanently authorizes school districts to tax residential and nonresidential property at different rates. Meyer said the legislation contains technical provisions that require districts to establish tax rates before the coming school year, but that he cannot endorse legislation that continues to treat apartments and other residential rental communities as commercial property.
“Across Delaware, apartments are home to our families, friends, and neighbors,” said Meyer. “But under this law, a building that houses teachers, nurses, seniors, first responders, and thousands of working families can be taxed at substantially higher rates than the single-family home next door, simply because those families rent instead of own. A home is a home, whether you own it or rent it. The families of Delaware deserve nothing less.”
Meyer said, by allowing the bill to become law without his signature, school districts can move forward with tax bills without the uncertainty that a veto could create. According to Meyer's office, the law comes after New Castle County's property reassessment where several school districts adopted split tax rates that classified apartment communities alongside warehouses, offices and industrial properties.
Meyer's office said apartment school tax rates increased by an average of 55% across New Castle County and nearly 81% in the Appoquinimink School District, while homeowner rates generally decreased. In some districts, the administration said a 4,000-square-foot single-family home faced a lower school tax burden than a 1,500-square-foot apartment.
House Bill 462 caps apartment tax rates at 185% of the residential rate. Meyer argues that limit still permanently establishes a flawed property classification.
Earlier this summer, Meyer backed Senate Bill 350, which would have classified multifamily housing as residential property and capped apartment school tax rates at 120% of the residential rate. According to the governor's office, the proposal would have provided nearly $15 million annually in relief connected to apartment properties without reducing school district revenue or affecting Kent and Sussex counties. The General Assembly adjourned without taking action on Senate Bill 350.
"Those taxes do not simply disappear," said Meyer. "They are reflected in higher rents, deferred maintenance, and fewer new housing opportunities for Delaware families. We cannot encourage compact, affordable housing while taxing that same housing as though it were commercial development."
The governor said Delaware faces a shortage of about 40,000 homes, including approximately 20,000 affordable and workforce housing units, and half of the state's renters are cost-burdened. Meyer is calling on the General Assembly to revisit the issue when lawmakers return and establish a permanent property classification system that treats rental housing as residential property while maintaining funding for public schools.
