As summer approaches, Lewes hotel operators and short-term rental owners are voicing strong concerns over proposed tax increases that could reshape the local lodging landscape.
Proposed Increases Stir Anxiety
At an April 7th public hearing, Lewes Mayor and City Council received feedback on two key potential tax changes:
- A 0.5% increase to the current 5% gross rental receipts tax (GRRT) on short-term rentals
- A new 2% lodging tax on hotels, on top of the existing 8% state tax
If approved, both changes would take effect on January 1st, 2026.
Mina Clark, who owns a beachside rental on Cedar Street, shared that her summer bookings are five weeks behind the usual pace. “If I don’t get any more bookings, the city isn’t getting any tax revenue either,” she warned.
Local Voices Weigh In
Other property owners echoed Clark’s concerns:
- Judy Rolfe said she removed her townhouse from the market after just breaking even last year.
- Rick Quill, of Blue Water House B&B, suggested a property tax increase would be more equitable.
- Joe Stewart, owner of the Inn at Canal Square, emphasized that local hotels rely on charm and community partnerships rather than large-brand reservation systems.
Deputy Mayor Khalil Saliba acknowledged the delicate balance, stating, “We have to be very conscious of how hotels and short-term rentals are doing.”
Support for Resiliency Fund Grows
While tax hikes were met with resistance, the proposed resiliency fund drew broad support.
The city has allocated $1.4 million in seed funding for FY2026, aiming to:
- Enhance disaster preparedness
- Strengthen climate resiliency
- Protect natural resources
Planning Commissioner Rich Innes noted the importance of local readiness amid federal uncertainties, referencing potential cuts to FEMA.
To ensure the fund’s long-term security, council is considering a charter amendment that would require a supermajority vote both to spend from and dismantle the fund.
Public Comments Open Through May 2
Lewes residents can submit feedback on the proposed tax changes and the resiliency fund until 4 p.m. on Friday, May 2nd.
Have thoughts on these proposed changes? Share your perspective in the comments, and stay tuned to our blog for the latest updates on Lewes city.
Source: Cape Gazette