What is disaster relief for property taxes?
Revenue and Taxation Code section 170 provides that if a major calamity such as fire, earthquake, or flooding damages or destroys your property, you may be eligible for property tax relief if the county where your property is located has adopted an ordinance that allows property tax relief to owners of damaged or destroyed property. In such cases, the county assessor will immediately reappraise the property to reflect its damaged condition. In addition, when it is rebuilt in a like or similar manner, the property will retain its prior value (Proposition 13) for tax purposes.
To qualify for property tax relief, you must file a claim with the county assessor within the time specified in your county ordinance, or 12 months from the date of damage or destruction, whichever is later. The loss estimate must be at least $10,000 of current market value to qualify the property for this relief. The property will be reassessed according to its damaged state and property taxes will be adjusted accordingly.
This property tax relief is available to owners of real property, business equipment and fixtures, orchards or other agricultural groves, and to owners of aircraft, boats, and certain mobilehomes - it is not available to property that is not assessable, such as state licensed mobilehomes or household furnishings.
What counties have adopted the ordinance to allow reassessment based on the property's damaged condition?
All California counties, except for Fresno County, have adopted an ordinance for disaster relief.
What is a major calamity?
The courts have defined "disaster, misfortune, or calamity" as some event out of the ordinary; an unforeseeable, sudden, or unusual occurrence, in contrast to gradual deterioration or worsening condition over time. Damage to a building or land that occurs gradually due to ordinary natural forces is not caused by a major calamity.
What are the filing procedures for disaster relief?
Since the form (and its title) differs from county to county, you must contact your county assessor for an application for reassessment for property damaged or destroyed by misfortune or calamity. In some cases, the form may be downloaded from the county's website. You may access your county's website or locate their telephone number at www.boe.ca.gov/proptaxes/assessors.htm click the county in which your property is located to access the county website.
To qualify for property tax relief, you must file a calamity claim form with your county assessor's office within 12 months from the date the property was damaged or destroyed
What if my county has not adopted a disaster relief ordinance?
You may still be entitled to a remedy on the lien date by means of section 51 (Proposition 8). The existence or nonexistence of a disaster relief ordinance does not prevent a property owner from seeking a reduction in value through the means of an assessment appeal.
How does the disaster relief affect my property tax bill?
The current property taxes will be reduced for that portion of the property damaged or destroyed. This reduction will be from the date of the damage, and will remain in effect until the property is rebuilt or repaired.
My home and all my documents, including my property tax bill, were destroyed in the October 2007 Witch Fire, which was proclaimed a disaster by the Governor. How can I pay my next installment?
If your property has been substantially damaged or destroyed in a Governor-proclaimed disaster and you have filed a disaster relief claim with the county assessor to reduce your taxes, you may file a claim to postpone the next installment of property taxes that occurs immediately after the disaster. If you file a "property tax deferral claim" with the county assessor before the next property tax installment payment date, that payment will be postponed without penalty or interest until the county assessor has reassessed the property, and you receive a corrected tax bill.
To qualify for deferral, for property receiving a homeowners' exemption, "substantial disaster damage" means damage amounting to at least 10 percent of its fair market value or $10,000, whichever is less. For all other property, the damage must be at least 20 percent of value. However, tax deferral is not available where property taxes are paid through impound accounts.
My house was damaged in an area that was proclaimed a disaster by the Governor. I don't want to rebuild in that same location. Can I buy another house in the same county and transfer the base year value of my damaged house to my new house?
Yes, section 69 provides for this relief to you under certain circumstances:
The damaged property must amount to more than 50 percent of its full cash value immediately prior to the disaster. This applies to any type of real property.
The property must be transferred to a comparable replacement property, acquired or newly constructed, within the same county and within five years after the disaster.
Comparability is crucial - the replacement property must be similar in size, utility, and function to the property which it replaces.
The replacement property must not exceed 120 percent of the full cash value of the property damaged or destroyed. Any amount of the full cash value of the replacement property that exceeds 120 percent of the full cash value of the damaged property (immediately prior to the damage) shall be added to the adjusted base year value of the damaged property. The sum of these amounts shall become the replacement property's replacement base year value.
To qualify, you must request this relief from the county assessor within 12 months of the disaster. Please contact your county assessor's office for an application.
Can I buy another house in a different county and transfer the base year value of my damaged house to my new house?
A principal residence that was damaged in an area that was a Governor-proclaimed disaster that occurred on or after October 20, 1991 may have its base year value transferred to a replacement residence in a different county only if the county has adopted an ordinance that allows such taxable value transfers. As of October 2007, there are eight counties that have such an ordinance: Contra Costa, Los Angeles, Modoc, San Francisco, Santa Clara, Solano, Sutter, and Ventura. The replacement residence must meet the following criteria:
It must be purchased within three years of the disaster.
Its market value must be of equal or lesser value than the market value of the damaged property immediately prior to the date of the disaster.
It must be eligible for the homeowners' or disabled veterans' exemption (your principal place of residence).
Claims for this exclusion must be filed with the county assessor.
After my property is rebuilt or repaired following the damage, will my property taxes be increased over what they were before?
No. Property owners will retain their previous factored base year value if the house is rebuilt in a like or similar manner, regardless of the actual cost of construction. However, any new square footage or extras, such as additional baths, will be added to the base year value at its full market value.
One of my rental duplexes was severely damaged by a fire and both units must be vacated. Meanwhile, is there any property tax relief during the next six months while it undergoes repair?
Yes, provided your county board of supervisors adopted an ordinance that allows property tax relief to owners of damaged or destroyed property under section 170.
If the county where your property is located has not adopted such an ordinance, you may still be eligible for property tax relief. Contact the county assessor's office for assistance.
In either case, if you rebuild a damaged or destroyed property in a like or similar manner, the property will generally retain its previous base year value for property tax purposes.
I have an avocado grove and due to the fruit fly infestation my entire crop was lost. Can I qualify for a calamity reduction?
Although the county assessor values the trees and irrigation system for property tax purposes, the actual fruit is not taxable; therefore, there can be no reduction in property taxes.
The fruit and trees in my orchard were damaged by heavy wind and rain storms. I lost some branches and a lot of the fruit. Additionally, I am sure to have a lesser crop next year. Does this qualify as disaster relief?
Growing crops cannot qualify for calamity reassessment because they are not taxable. If your trees sustained physical damage of at least $10,000, they may qualify for reassessment; however, the mere possibility of a lesser crop next year does not fall within the definition of physical damage to the property.
My manufactured home was destroyed in an area that was proclaimed a disaster by the Governor. Am I eligible for any property tax relief?
Yes. In addition to the above provisions, if a manufactured home is totally destroyed in a Governor-declared disaster, it may be replaced by a comparable unit without an increase in either the property taxes or the vehicle license and registration fees.
My house has a cracked slab. Does this qualify as a calamity?
No. Although any construction defect will adversely affect the value of the property, it does not qualify for relief under this program. A court decision has determined that since the damage occurred gradually due to natural forces and not as a sudden event out of the ordinary, an exact date cannot be established. Therefore, there can be no reduction under this provision.
How do I know the amount of property taxes to be refunded if my house was partially destroyed by a fire?
An appraiser from the county assessor's office will determine the market value of your house before and after the damage. The percentage of the loss is then applied to the assessed value of your house and a refund is issued. The land value will remain unchanged.
Once I file my application, what is the process?
After an application is processed by the county assessor's office, a notice of proposed new assessment will be sent to you. After you return this notice to the county assessor's office, a separate supplemental refund will be made based on the amount of reduction. The refund will be prorated from the date of destruction to the end of the fiscal year. You must still pay your regular tax bill.
What if I disagree with the value as determined by my county assessor's office?
If you disagree with the value established by the county assessor's office, you must file an appeal within six months from the date on the notification of proposed values. A hearing will be scheduled by your County Assessment Appeals Board or County Board of Equalization.
In February, my small plane was completely destroyed in a crash due to a mechanical failure. Can my plane qualify for reassessment under section 170 as property damaged by calamity?
Yes. Although misfortune or calamity is typically associated with natural physical forces, it may be broadened to include sudden, unexpected man-made causes such as non-deliberate mechanical failure on your plane. Thus, your personal property tax bill could be adjusted to reflect the zero value of your plane as of the date of the crash and prorated for the current and ensuing fiscal years.
Our home was damaged from a forest fire last September and we had to move out while it is being repaired. Are we still allowed the homeowner's exemption even though we have not returned to our house as of January 1?
Yes. Temporary absence from a dwelling for repairs made necessary by a natural disaster will not result in the loss of your homeowner's exemption as long as you have not established permanent housing elsewhere.
My home was damaged by an electrical fire last year, but I don't want to rebuild. Can I transfer my base year value to another house?
If you are over age 55 or disabled and your principal residence has been substantially damaged or destroyed by any type of misfortune or calamity, you
may transfer the base year value under the provisions of Propositions 60/90/110 if the damaged residence is sold and another residence of equal or lesser value is purchased or newly constructed within two years of the sale of the property in its damaged state. A timely claim must be filed with the county assessor. For further information and qualifications, see the FAQs for Propositions 60/90/110 under Real Property Exclusions or Letter To Assessors No. 2006/010.
