Delaware

Property Classification:

The Delaware statutes do not specifically dictate classes of property since all real property is taxed at the same rate (Del. Code tit. 9, § 8101). The only exceptions are land used for agricultural, horticultural or forestry purposes and certain types of businesses that qualify for property tax incentives.

1. Forest use land

Land that is actively devoted to agricultural, horticultural or forest use is eligible for valuation, assessment and taxation, including for school tax purposes, at the value the lands have for agricultural, horticultural or forestry use (Del. Code tit. 9, § 8329).

Forest use land - Land shall be deemed to be in forest use when devoted to tree growth in such quantity and so spaced and maintained as to constitute in the opinion of the State Forester a forest area. (Del. Code tit. 9, § 8332)

Qualifications - Land which is actively devoted to agricultural, horticultural or forest use shall be eligible for valuation, assessment and taxation at current use when it meets the following qualifications: (Del. Code tit. 9, § 8334)

(1) It has been so devoted for at least the 2 successive years immediately preceding the tax year for which valuation under this section is requested or;

(2) The area of such land

(i) is not less than 10 acres in such use, and the gross sales of agricultural, horticultural or forestry products produced thereon together with any agricultural program payments and sales of commodities received under government entitlement programs have averaged at least $1,000 per year within a 2-year period of time immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales and such payments amounting to at least $1,000 per year, within a 2-year period of time, or

(ii) is less than 10 acres in such use and the gross sales of agricultural, horticultural or forestry products produced thereon together with any agricultural program payments and sales of commodities received under government entitlement programs shall have averaged at least $10,000 per year within a 2-year period of time immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales and such payments amounting to at least $10,000 per year within a 2-year period of time. In computing such anticipated yearly gross sales for land under 10 acres in such use, the maximum amount computed from future sales of forestry products shall not be more than $2,000 annually.

In applying these criteria, and in determining whether the minimum acreage requirements are met, all contiguous parcels of land held by identical owners in identical proportions of ownership and in identical legal form of title, shall be considered as a single unit.

(3) Application by the owner of such land for valuation under this section is submitted on or before February 1 of the year immediately preceding the tax year to the assessor of the taxing district in which such land is situated on the form prescribed by the State Farmland Evaluation Advisory Committee together with evidence in writing of the required sales, payments and anticipated sales and payments.

In determining the total area of land actively devoted to agricultural, horticultural or forest use, included in the area is all land under barns, sheds, silos, cribs, greenhouses and like structures, lakes, dams, ponds, streams, irrigation ditches and like facilities. However, the land under and such additional land as may be used in connection with the farmhouse will be excluded in determining the total area

Roll-back taxes - Roll-back taxes are imposed when land is applied to a use other than agricultural, horticultural or forestry, equal to the difference, if any, between the taxes paid or payable on the basis of the valuation and the assessment authorized for special use and the taxes that would have been paid or payable had the land been valued, assessed and taxed as other land in the taxing district, in the current tax year immediately preceding, in which the land was valued, assessed and taxed as special use (Del. Code tit. 9, § 8335).

Valuation and Assessment:

For general property tax purposes including school tax purposes, the value of land which is actively devoted to agricultural, horticultural or forest use and which has been so devoted for at least the 2 successive years immediately preceding the tax year in issue, shall, on application of the owner, and approval thereof be that value which such lands have for agricultural, horticultural or forest use. (Del. Code tit. 9, § 8329)

Quarterly supplemental assessment lists - In addition to the annual assessment of property each board of assessment of Kent and Sussex Counties and the Department of Finance of New Castle County may prepare quarterly supplemental assessment rolls.

Whenever the Board of Assessment in Kent County or Sussex County or the Department of Finance in New Castle County places a property on a supplemental assessment roll, it must send notice by regular mail addressed to the owner of the property at the address shown on the assessment rolls, or if the address of the owner does not appear on the assessment roll, then to the person occupying the property (Del. Code tit. 9, § 8342).

New Castle County - the first supplemental assessment roll must be certified to the government of New Castle County on July 1 of each year, the second on October 1 of each year, the third on January 1 of each year and the fourth on April 1 of each year. (Del. Code tit. 9, § Sec. 8339)

Kent County - the first supplemental assessment roll must be certified to the government of Kent County on June 1 of each year; the second on September 1 of each year; the third on December 1 of each year; and the fourth on March 1 of each year (Del. Code tit. 9, § 8339).

Sussex County - the first supplemental assessment roll must be certified to the government of Sussex County on May 1 of each year; the second on August 1 of each year; the third on November 1 of each year; and the fourth on February 1 of each year (Del. Code tit. 9, § 8339).

Levy of tax - On the date of certification of a supplemental tax roll to the respective county government, the property owners listed are liable to pay taxes equal to the assessed value of the property multiplied by the tax rates for the then current fiscal year applicable to the property, reduced by the following (Del. Code tit. 9, § 8340):

25% where the property is listed on the second supplemental assessment roll;

50% where the property is listed on the third supplemental assessment roll; and

75% where the property is listed on the fourth supplemental assessment roll.

2.Commercial Forest Plantations Exemption

Any landowner who establishes a "commercial forest plantation" and otherwise complies with the provisions of this chapter shall be entitled to a 30-year exemption from county property taxes on such plantation. (Del. Code tit. 9, § 3502)

Commercial forest plantation -A commercial forest plantation within the meaning and purpose of this chapter is a contiguous area of land of not less than 10 acres which is not primarily valuable for agricultural purposes and upon which the owner proposes to develop and maintain a forest either through planting or natural reproduction or both. Such land shall at the time of listing as a commercial forest plantation carry sufficient forest growth of suitable character and so distributed as to give reasonable assurance that a stand of merchantable timber will develop therefrom. The intent and purpose of this section is to exclude from classification as a commercial forest plantation, land planted as a nursery, orchard, or for ornamental purposes. (Del. Code tit. 9, § 3501)

Application for exemption; requirements; examination (Del. Code tit. 9, § 3503)

Any owner of a commercial forest plantation may make application to the Department of Agriculture to have such land listed for tax exemption. In making such application, he shall file with the Department of Agriculture a sworn statement of compliance with the provisions of this chapter together with the location, description and acreage of the planted lands or the naturally reforested lands. Additionally, all applications for tax exemption must be accompanied by a forest management plan approved by the State Forester. The Department of Agriculture upon receipt of such application shall direct the State Forester to make or cause to be made a thorough examination of the property described in the application and report his findings to the Department of Agriculture.

Removal of exempt commercial forest plantation from county assessment books (Del. Code tit. 9, § 3504)

If the Department determines from the report of the State Forester that the owner has complied with the purpose of this chapter, namely, to develop and maintain upon his land a commercial forest, the Department shall recommend to the assessment board in the county wherein the lands are situated that the lands be removed from the list of assessable property for the period of 30 years, and thereupon the property shall be removed from the list of assessable property for the exemption period except as provided in this chapter

Voluntary withdrawal of land from exempt status; requirements (Del. Code tit. 9, § 3505)

Any owner of land listed as commercial forest plantation desiring to withdraw said land from operation of this chapter shall make written application to the Department of Agriculture for such withdrawal. Such application shall be granted only upon evidence that the owner has paid to the county treasurer the amount of tax due on said land as determined by the county board of assessment.

The board of assessment shall determine the average value per year of the lands during the time they have been exempt from taxation, and, further, shall determine the amount of tax due on the lands calculated according to the several yearly tax rates at the average valuation. Upon presentation to the Department of Agriculture of the application as provided in this section, the Department of Agriculture shall at once notify the county board of assessment of such action and thereupon the property described in the application shall be removed from classification and thereafter taxed as other property.

Restrictions on use of timber (Del. Code tit. 9, § 3506)

The owner of any land listed under the provisions of this chapter may fell and use any dead or injured timber, and cut and remove any live trees when such have been marked for removal with the approval and under the supervision of the Department of Agriculture.

Removal of lands from exempt status by Department; notice; hearing; appeal (Del. Code tit. 9, § 3508)

If the State Forester recommends the removal of any lands from classification as commercial forest land, and the recommendation of the State Forester is approved by the Department, it shall notify in writing the county board of assessment thereof, and the board of assessment shall immediately restore the lands to the assessment lists.

The board shall also determine the amount of tax due upon the lands according to the average valuation of the lands at the tax rates prevailing during the period of exemption. The total amount of taxes as calculated shall be certified to the receiver of taxes and county treasurer of the county for collection as other taxes are collected, but with no penalty attached thereto.

3.Exemption of unimproved land in Agricultural Preservation Districts

Under the Agricultural Lands Preservation Act, all unimproved land of owners of real property located in an Agricultural Preservation District is exempt from taxes imposed under valuation and assessment provisions (Ch. 83, Tit. 9, Code), local school taxes (Ch. 19, Tit. 14, Code), and inheritance taxes subject to certain restrictions. (Sec. 911, Tit. 3, Code)

The state of Delaware does not have a severance or yield tax on timber or timber products.

Delaware Forest Service. Property tax exemptions (Commercial Forest Planation Act).