City officials are reviewing a new property tax proposal that could provide relief for residents who use their Lewes homes as their primary residence. The concept, known as a homestead deduction, would lower the taxable value of owner-occupied homes while maintaining overall revenue neutrality for the city.
The deduction would be limited to full-time residents who meet specific criteria, including verification through tax filings, voter registration, and vehicle registration. The purpose of the plan is to offer greater support to long-term and lower-income homeowners, particularly seniors, who are more affected by property tax increases.
Under the proposal, those who own second homes or rental properties would pay a slightly higher share to offset the deduction provided to qualifying residents. The adjustment would not reduce the city’s total tax revenue but would shift the balance of who pays more or less depending on how the property is used.
Early estimates indicate that just under one-third of homes in Lewes are owner-occupied. Officials noted that the homestead program could help stabilize housing affordability and preserve community character by encouraging full-time residency.
If the city decides to move forward, additional analysis would be required to determine the appropriate deduction amount and to ensure compliance with state and county regulations. Developing and implementing the program could take up to two years once approval is granted.
