Introduction
Delaware is known for its low property tax rates, making it an attractive option for homeowners and real estate investors. Unlike many states, Delaware has a statewide average property tax rate of just 0.56%, one of the lowest in the U.S.
This guide explains how Delaware property taxes work, how they compare to other states, how to calculate property tax, and ways to reduce tax liability.
Does Delaware Have Property Tax?
Yes, Delaware has property taxes, but they are significantly lower than in most other states.
- Property tax rates vary by county and municipality.
- The state does not collect property tax; instead, local governments levy and collect taxes.
- Delaware does not have school district income taxes, which helps keep overall property tax burdens lower.
Delaware Property Tax Rates by County
| County | Average Property Tax Rate | Median Property Tax Payment |
|---|---|---|
| New Castle County | 0.55% | $1,385 |
| Kent County | 0.51% | $1,200 |
| Sussex County | 0.34% | $1,078 |
How Delaware Property Taxes Compare to Other States
| State | Average Property Tax Rate | Median Annual Property Tax |
|---|---|---|
| Delaware | 0.56% | $1,380 |
| New Jersey | 2.49% | $8,432 |
| Illinois | 2.23% | $5,800 |
| California | 0.76% | $4,500 |
| Texas | 1.60% | $4,200 |
| Florida | 0.89% | $3,200 |
Delaware’s low property tax rates make it an ideal location for homeowners and retirees looking to minimize tax burdens.
How to Calculate Delaware Property Taxes
Formula:
Assessed Value × Local Property Tax Rate = Property Tax Due
Example:
- Home Assessed Value: $300,000
- Tax Rate: 0.55% (New Castle County)
- Property Tax Due: $300,000 × 0.55% = $1,650 per year
Assessed vs. Market Value
- Delaware assesses property values differently by county.
- The assessed value is often lower than market value, reducing tax liability.
Property Tax Exemptions in Delaware
Delaware offers several property tax exemptions and credits to reduce tax liability:
- Senior School Property Tax Credit
- Available to homeowners aged 65+.
- Provides up to $500 in property tax relief.
- Disabled Veteran Property Tax Exemption
- Veterans with a service-connected disability may qualify for property tax reductions.
- Agricultural Land Exemption
- Properties used for farming may receive lower tax assessments.
- Homestead Exemptions
- Some counties offer homestead exemptions for primary residences.
How to Pay Delaware Property Taxes
- Tax bills are sent by county tax offices (New Castle, Kent, Sussex).
- Most homeowners pay property taxes through mortgage escrow accounts.
- Direct payments can be made via check, online banking, or in person at local tax offices.
Payment Deadlines
- New Castle County: Due September 30.
- Kent County: Due September 30.
- Sussex County: Due October 31.
Late Payment Penalty: Interest accrues at 1% per month on unpaid balances.
How to Reduce Your Delaware Property Taxes
- Apply for eligible exemptions (senior, veteran, agriculture, homestead).
- Review property tax assessments and request reassessments if overvalued.
- Ensure tax payments are made on time to avoid penalties.
- Work with a tax professional to identify potential tax-saving opportunities.
Delaware Property Taxes for Real Estate Investors
- Lower property taxes mean higher net rental income.
- No state-level real estate transfer tax (only county-level).
- Delaware’s tax-friendly environment attracts retirees and out-of-state buyers.
IRS Tax Deductions for Delaware Property Owners
Delaware homeowners and investors can deduct:
- Mortgage Interest – Deductible on Schedule A (Form 1040).
- Property Taxes – Deductible on federal tax returns up to $10,000.
- Depreciation on Rental Properties – Reported on Form 4562.
What Happens If You Don’t Pay Property Taxes?
| Missed Payment | Consequence |
|---|---|
| Late Payment | 1% monthly interest on unpaid taxes |
| Failure to Pay for 2+ Years | Tax lien or foreclosure risk |
Property owners should pay property taxes on time or apply for installment payment plans if needed.
Conclusion
Delaware has one of the lowest property tax rates in the U.S., making it a tax-friendly state for homeowners and real estate investors. Homeowners can reduce tax liability by applying for exemptions and ensuring accurate property assessments.
For expert property tax planning, schedule a meeting with our CPA Anshul Goyal by clicking at https://calendly.com/anshulcpa/ now.
Frequently Asked Questions (FAQs)
1. How much is property tax in Delaware?
Delaware’s average property tax rate is 0.56%, which is one of the lowest in the U.S.
2. Does Delaware offer property tax exemptions?
Yes, Delaware offers senior, veteran, and agricultural exemptions to lower property tax bills.
3. When are Delaware property taxes due?
- New Castle & Kent County: September 30
- Sussex County: October 31
4. Can I deduct Delaware property taxes on my federal return?
Yes, property taxes are deductible up to $10,000 under federal tax law.
5. What happens if I don’t pay my Delaware property taxes?
- 1% monthly interest penalty on unpaid balances.
- Risk of tax liens or foreclosure if unpaid for 2+ years.
About Our CPA
Anshul Goyal, CPA EA FCA is a licensed Certified Public Accountant and an IRS Enrolled Agent (EA). He specializes in Delaware property tax planning, real estate investment tax strategies, and tax compliance.
Schedule a consultation today with Anshul Goyal, CPA, for expert tax guidance.