Delaware has started the process of property tax reassessments for the state's almost 500,000 taxable parcels.
As part of a lawsuit settlement over equity in education, Delaware is undergoing a property tax reassessment across the state, and it's hired Tyler Technologies to conduct the process, starting in New Castle County.
"Part of our contract with each county is to conduct what we would call a 'boots on the ground' inspection of every parcel, residential and non-residential parcels alike, and conduct an exterior inspection of each parcel's improvement," said Mike McFarlane, senior project appraisal supervisor for Tyler. "To say that in the simplest context, [an inspection of] the home itself."
Data collectors, as part of that ground force effort, will be seen walking through neighborhoods with county government-issued identification cards available upon request and bright yellow and orange work vests emblazoned with the company's name and logo, McFarlane said.
Inspectors will attempt to interact with property owners to garner additional information about a given parcel, but residents need not worry about being home for the process if data collectors stop by to conduct the exterior inspection while they're at work or out running errands.
"The first step in the interaction for a particular residence, let's say, would be to knock on the door, then if the homeowner is available to provide an informational brochure about the reassessment in general, and particularly the field inspection process," McFarlane said. "From there, ask them some questions about their home; how many bedrooms, bathrooms, some interior characteristics that they will not be privy to, because they're only conducting an exterior inspection. They would then measure the exterior of the primary improvements, and if there are any additional sheds or garages, they would also take those measurements, as well as observe the condition and quality of all the improvements on a particular parcel."
But for those that aren't home, McFarlane said there will be multiple opportunities to engage or contest findings by the inspectors or correct assumptions about the property.
"If no one answered the door, they would continue to conduct an exterior inspection and would assume certain things about the interior of the home that can later be either corroborated or refuted by the homeowner by way of a data mailer," he said. "That's essentially the next step in the process...We will send what we call data mailer to each and every homeowner, or parcel owner, and say, 'Here's what we observed at the time of inspection and please, if we have anything misstated or omitted, send it back with the correct information, and we'll update our records accordingly."
The project is expected to take multiple years to complete. There are roughly 212,000 parcels to be inspected in New Castle County, 180,000 in Sussex County, and an additional 80,000 in Kent County. McFarlane estimates New Castle County's portion of the reassessment will be completed in time for the 2023 taxation period.
At four different points in the process, taxpayers will have the opportunity to engage with the process. The first two--home inspection and data mailer responses--are followed by tentative market valuation based on information collected in the field. Taxpayers can then request a meeting with a Tyler representative.
"The taxpayer, at that point, would have the ability to schedule an informal review of their estimated market value with Tyler appraisals staff to say, 'Hey, I don't think I could sell my home for that.' I mean, that's the ultimate question when they get that estimated new market value," he said. "That informal review allows them to participate in an interaction with Tyler appraisal staff to potentially seek another opportunity to say, 'Hey, you might have missed something,' or, 'You've overestimated my home's condition.' Or just simply, 'The market value's too high.' Naturally, you probably would not hear from them if the estimated market value was too low."
Finally, if not of those steps in the process provide satisfaction, a taxpayer could file a formal appeal with the Board of Assessment Review.
Tyler, which holds a corporate headquarter in Texas and operates an appraisal and tax headquarter in Ohio, has several members with expertise on the Mid-Atlantic region "immediately in Delaware," McFarlane said, and their contract is not "contingent upon the amount of market value raised as a result of the reassessment." Given the scale of the project, he said not many other companies could have completed the effort to satisfaction.
He also mentioned, in New Castle County specifically, officials were looking for ways to mitigate the impact a reassessment would have on taxpayers' wallets.
"In the case of Delaware, I think it's safe to say that, in most cases, they'll see an increase in their assessed value, which is, for the purposes of this project, meant to estimate [2023's] current market value of every home. And I say that relatively confidently because the last reassessment was in 1983 in New Castle and, for Kent and Sussex, it was in the 70s. So I think it's fair to say that there should be an increase in most parcels overall estimated market value as a result of the reassessment," McFarlane said. "That said, there is a correlation between rising assessment values and a decrease in associated tax rate. It's an inverse relationship, typically. I can say that New Castle County's portion of the tax rate, they have they intend by way of legislation that was passed, to not raise the taxes for the county's portion. As market values as a whole throughout the county rise, the associated tax rate goes down."
A Tyler Technologies property assessor examines a home in New Castle County
The process for valuation of non-residential properties--"which would include commercial, industrial, exempt properties, special purpose properties"--is exactly the same, McFarlane said. Additionally, Tyler isn't--generally--looking to catch anyone who may have forgotten to report home improvements or otherwise failed to notify county officials of upgrades to a parcel. While in extreme instances, he said it was possible, in most cases, it wouldn't be an issue.
"It's one of the common fears that taxpayers have is, 'Oh, well, what if it's the case that Tyler, during the course of their field inspections, uncovers improvements to my property that were otherwise not known to the county--or, particularly, that were not permitted,'" he said. "The answer is no. We will observe and collect that information, but we are not reporting it back. And I don't believe the county seeks any recourse for improvements that were previously not permitted...Our data collectors will observe that. They'll measure it, or they'll put it on the assessment tax roll. But we're not going to go back and retroactively tell the Department of Land Use, 'Hey, we found this and there wasn't a previous permit for it, and the Land Use Department will seek any sort of negative recourse to that end."
As the process gets underway in Delaware's southern counties, McFarlane wanted to ensure residents were aware of their company's websites for each county--New Castle County, Kent County, Sussex County--and, in particular, the in-person town halls taking place to field questions in Kent County:
- October 12, 1:00 p.m. - Milford Senior Center
- October 12, 6:00 p.m. - Harrington Fire House
- October 14, 1:00 p.m. - Kent County Levy Court Chambers
- October 14, 6:00 p.m. - Cheswold Fire House
