House Bill 242

Passed

Dual School Tax Rate Option for 2025-2026

What House Bill 242 Does, in Simple Terms

For the 2025-2026 school tax year only, school districts that sit entirely in New Castle County may replace their single local school tax rate with two rates - one for residential property and one for non-residential property - as long as the district does not collect a penny more than it was already scheduled to collect this year.

Who Can Use This Option

Eligibility for dual tax rate system

Eligible School Districts

Traditional public school districts that are fully inside New Castle County.

District choice: If your district chooses not to act, nothing changes for that district under this bill.

The Guardrails & Rules

Built-in protections and requirements

Rate Requirements

Non-residential rate must be at least as high as the residential rate and no more than 2 times the residential rate.

Revenue Neutrality

Total revenue must remain the same. Districts may rebalance who pays what, but they may not increase the total amount they collect for this year.

What Happens Next, Step by Step

Timeline and implementation process

Governor's Action

The bill is "Ready for Governor." If the Governor signs it, it becomes law and takes effect immediately.

District Decisions (10 Business Days)

After it takes effect, each eligible district will have 10 business days to vote on new split rates and issue a new tax warrant to New Castle County.

County Reissues Bills

Once the County receives a new warrant from a district, it must adjust any initial school tax bills already sent for that district using the new rates, and extend the payment deadline to November 30, 2025 for bills that change.

Refunds for Overpayments

If you already paid and your bill goes down, the County must credit the overpayment to your future school-tax liability. If you would rather get the money back, you can submit a written refund request to New Castle County and the County must issue a refund.

What Residents and Businesses Should Expect

Homeowners

If your district adopts split rates, you may see a reduction in the school portion of your property tax bill compared with the single-rate approach. The exact change will depend on the mix of residential and non-residential property in your district and the rates your school board adopts.

Businesses

Expect your school-tax rate to be at least the residential rate and possibly up to twice that rate. Districts must keep total revenue flat, so if residential as a group pays less, non-residential will pay more.

Important Limits to Remember

One-Year Tool: This is a one-year tool tied to the 2025-2026 school tax year only.

School Taxes Only: It affects only the local school tax portion of your property tax bill. County tax, sewer, or other fees are not changed by this act.

Revenue Neutral: Total district revenue cannot increase because of this reset. The law only allows a rebalancing between residential and non-residential classes.

Bill Status

✅ Passed

Signed into law by the Governor

Effective: Immediately upon signing

Applies to: 2025-2026 school year only

Why This Matters

After reassessment, many homeowners saw school-tax shifts that districts could not quickly counter using the single-rate system.

Lets districts smooth out the burden

Keeps total collections unchanged

Provides administrative protections

Practical To-Dos

Watch for district announcements about split rate votes

Check mailbox for revised bills from New Castle County

Forward revised bills to mortgage company if using escrow

Official Documents