The Rehoboth Beach rental tax will soon be comparable to most other beach towns.
The new year will bring an increase to the residential rental tax in Rehoboth Beach.
The City Commissioners recently voted to raise the rental tax from three to six-percent.
Mayor Paul Kuhns says the tax has been at three-percent since 1995.
"Unfortunately we’ve been kind of deferring a lot of changes in our revenue sources over the years, as well as we’ve been deferring a lot of of expenses that we should have been taking care of over the years," Kuhns said.
The rental tax increase will become effective January 1. Mayor Kuhns says rental contracts signed prior to January 1 will be honored at the previous three-percent.
Kuhns says the increase is expected to raise quite a bit of revenue for the resort.
“This year…..I mean in this next fiscal year, I would say it’s probably going to raise an additional $500,000. But in the next year, when it’s 6-percent for everyone, it should be little bit over $1 million additional to go into the budget," Kuhns said.
The additional revenue will help offset the cost of services like beach cleaning and trash pick-up.
Current rental tax fees in the surrounding beach towns stand at 7-percent in Bethany, 7.5 percent in Fenwick Island and 5-percent in Lewes.
