FENWICK ISLAND, Del. - Taxes fluctuate almost every year, and Delaware is no exception. This year, the state has implemented a 4.5 percent tax on all short-term rentals. In response, the Fenwick Island Budget and Finance Committee is evaluating potential changes to its own rental tax policies.
Currently, short-term rental properties in Fenwick Island are taxed at a higher rate than hotels. When combined with the new state tax, short-term rentals are now subject to a total tax rate of 12.5 percent, while hotels pay only 11.5 percent.
Fenwick Island considers rental tax adjustment amid Statewide changes.
With summer approaching, vacationers will soon flock to Fenwick Island, filling hotels and rental properties along the coast. Among them will be Bruce Bogdanski, who plans to book a hotel for his fishing trip. For him, the lodging itself is secondary. "The hotel is just a bed to sleep in at night," Bogdanski said.
The Budget and Finance Committee discussed the tax disparity and potential adjustments. Fenwick Island Treasurer Bill Rymer suggested a more balanced approach. "Our committee discussed, should we try and meet in the middle, where the total across the board would be 12 percent, which would result in the town having to reduce by half a percent on the residential community and possibly increase the hotel by half a percent," Rymer said.
As living costs continue to rise, many hope tax reductions could provide some financial relief. "Always good for the owners. We need the revenue," Bogdanski added.
Fenwick Island officials are working to find a balance between generating revenue and maintaining a competitive edge with other coastal communities. While discussions are ongoing, town officials confirm that tax rates will remain unchanged for the 2025 summer season, with potential adjustments being considered for 2026.