Delaware’s three counties have been operating under an antiquated 35- to nearly 50-year-old system for real estate property tax assessed values. The last assessments in Sussex, New Castle, and Kent Counties were conducted in 1974, 1983, and 1987 respectively. In response to this, each county hired Tyler Technologies (Tyler) out of Texas to head up the mass property revaluation, starting with Kent County and then most recently with New Castle County.
The phases of their reassessment process involved an aerial imaging of all real property in Spring 2021, field work and property data collection starting in 2021 through the end of 2024, market data collection in 2022-24, and formulation of new property value assessments with new base date values of July 1, 2023 for Kent County and July 1, 2024 for New Castle and Sussex counties.
Tyler Technologies utilizes a mass valuation statistical model in arriving at their new tentative assessed values disseminated in November 2024. They are currently conducting informal hearings for owners and their representatives to discuss/challenge these tentative assessed values. The informal hearings will continue into and through early January 2025. Tyler will then present the final assessed values in mid-February 2025.
It is important to remember that sometimes statistical models do not fit market value pricing. Real estate is an imperfect market that is both cyclical and local. For example, some mass valuation models do not necessarily take into consideration in-place contract rents versus market economic rents, deferred maintenance, or actual property occupancy versus reported overall market occupancy. Local market knowledge and experience makes a difference.
Property owners will have until March 14, 2025 to challenge their real property assessments to The Board of Assessment Review of New Castle County. While there is still time to act, the window on that is coming up very quickly. In order to do this, a commercial real estate appraisal is needed with supporting expert witness testimony at tax appeal hearings. Fortunately, Apex Realty Advisory is up to the task, having recently taken part in several successful tax appeals process in Kent and New Castle Counties that saved our clients tens of millions of dollars on their new assessments.
It is not uncommon for property tax assessments to clash with local market data, especially for special purpose properties or ones that suffer from obsolescence. This may be the grounds for filing an appeal to obtain reductions. It can be challenging to understand how the property tax assessment is determined, how to compare it to market based inputs, and when to challenge and appeal. Having the right team of real estate professionals at your disposal during this period of adjustment is essential. This makes a review of new assessments by a local, third-party commercial real estate valuation expert with a fair and unbiased opinions very important.
The valuation professionals at Apex Realty Advisory work in Delaware and follow local market conditions and sales activity closely, thus providing a better understanding the market dynamics. If you find yourself in need of assistance in the tax appeal process, feel free to contact us by phone or through our website portal.