Rental tax increases coming to Fenwick Island

Real estate is big business in the small town of Fenwick Island, but a recent tax increase could hurt the real estate industry as well as other local businesses.

John Kleinstuber, a real estate broker for John F. Kleinstuber & Associates, Inc. said, "It's a slippery slope. You know, they start to raise it, we heard they were talking about raising it, I was concerned it was going to go up substantially, that worried me."

The Fenwick Council recently approved an ordinance amendment allowing the town to increase rental tax to help generate money for things like public works and public safety.

Kleinstuber said, "Fenwick has always had a great public works group, group of people that do that job, and the police protection, we have a wonderful police department so I am a fan of all of that, if they use that money to increase that or make that better then, that's worth it."

Taxes will be going up by .5% for residential renters and hotels, and 1% for commercial businesses who rent their property, but some Fenwick residents are now concerned that the town will continue to raise the rental tax each year.

Kleinstuber said, "Half percent, you can kind of deal with that. If they start doing it every year or two or few years, eventually that's going to have an impact for sure."

We're told this increase will go into effect in November, to try and avoid hurting the rental industry.

Fenwick Island's Town Manager Teresa Tieman said, "It becomes effective November 1st and typically, that is a very slow rental time for hotels residents and motels so it wont impact them directly this year, but more so next year."

Despite this, we're told businesses who rent their property will be getting the short end of the stick as they will still likely be impacted this year.

This is the first time the town has increased rental taxes in many years.

The city manager tells us whenever the town looks at increases of any sort, they try to be thoughtful and take into consideration how it will impact everybody, but they say this increase is necessary so they can move forward with projects like their sidewalk study.

Categories: Delaware, Local News