Court Upholds HB-242: What the Ruling Means for Property Owners
Delaware Court of Chancery ruled in favor of defendants on October 30, 2025, upholding House Bill 242 as constitutional. All six challenges were rejected. Learn what this means for your property taxes.
✅ Court Decision: HB-242 Upheld
The Delaware Court of Chancery ruled in favor of all defendants, rejecting every constitutional challenge to House Bill 242. The dual tax rate system is now validated.
Vice Chancellor Lori Will entered judgment for the defendants on all counts, finding that House Bill 242 and its implementation do not violate the United States Constitution, the Delaware Constitution, or state statutes. The 58-page opinion systematically addressed and rejected each of the six challenges raised by plaintiff property owner associations.
The court's ruling addressed six major constitutional and statutory challenges:
The court's decision has immediate and concrete implications for all New Castle County property owners:
HB-242 Is Valid
The dual tax rate system distinguishing between residential and non-residential properties is constitutional and will be implemented.
Action: The court has validated the use of different school tax rates for residential versus non-residential properties for the 2025-2026 tax year.
Tax Bills Will Be Issued
New Castle County can now proceed with issuing supplemental school tax bills that reflect the dual tax rate system.
Action: Property owners should expect to receive supplemental tax bills in the coming weeks that implement the school district rates established under HB-242.
Classification Corrections Allowed
The County may correct property classification errors, and affected property owners will have opportunities to challenge those corrections.
Action: If your property classification is corrected, you'll be notified and have the right to appeal through established administrative procedures.
One-Year Law Only
This ruling applies only to the 2025-2026 tax year, as HB-242 is a temporary, one-year measure.
Action: The legislature may consider permanent tax structure changes in future sessions.
Here's what property owners can expect in the coming days and weeks:
Court Decision Issued
October 30, 2025County Begins Processing Tax Bills
Shortly After RulingSupplemental School Tax Bills Mailed
Coming WeeksProperty Owners Can Review and Appeal Classifications
After Bill ReceiptPotential Consideration of Permanent Tax Structure
2026 Legislative SessionExplore these resources to learn more about the court decision and your tax situation:
- Complete court ruling summary with analysis of all six counts
- Full 58-page court opinion (PDF) from Delaware Courts
- Original case background and legal arguments
- House Bill 242 full text and explanation
- School district tax rates for all five districts
- Property classification appeal procedures
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