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Judge rules Delaware property tax system unconstitutional; major changes to residents’ bills could follow

From The News Journal

A judge has ruled that Delaware’s property tax system is unconstitutional, potentially triggering significant changes in annual tax bills for the first time in decades.

Vice Chancellor J. Travis Laster wrote on Friday that all three counties calculate tax bills with property values that are so outdated some taxpayers get an unfair discount while others pay taxes on a larger share of their property’s actual worth.

Those inequities violate the state constitutional requirement that property owners be taxed equally, Laster said in a 149-page ruling in Delaware’s Court of Chancery.

“By continuing to use the decades-old valuations when preparing their assessment rolls, the counties treat owners of similar properties differently,” Laster wrote.

The ruling could eventually affect every property that is taxed in Delaware, and begins a debate on how to make the state’s property tax system fair in the eyes of the courts.

Laster’s opinion asks attorneys for both sides to submit a schedule in 45 days to govern that discussion, which is likely to be litigated in court before any residents see changes to their tax bills

The plaintiffs, a group of education funding activists and Wilmington officials, want property values to be reassessed — a potentially costly, months-long process in which assessors visit each property and update its value in current housing market conditions.

It could lead to property tax increases for those who are currently underpaying relative to the market value of the property, decreases for those who are overpaying and some tax bills changing very little.

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