Property Tax Post: Property Tax Savings a Possible Option after Weather Disasters


Flood

The peak of hurricane season is upon us, with Hurricane Harvey pummeling Texas and Louisiana since its landfall on Aug. 25. In the wake of hurricanes, tropical storms, tornados, or other potentially catastrophic “acts of God,” among other things, some property owners will be left to consider how to deal with real and personal property tax obligations levied against damaged or destroyed property.

In most cases, property tax is levied against a value that was determined at a much earlier date in the year, that is, months before any devastation hit.

In Texas, for instance, county assessors value property on Jan. 1 of each year,[1] and taxing authorities begin collecting property taxes levied against all or part of the property’s value in October later that year. That means if you are a taxpayer who owns property that has been affected by Harvey’s ferocity, there is a great likelihood your property value has gone down significantly since January. Fortunately, in the case of some Texas taxpayers, the governing body of a taxing district may authorize property that was damaged in a disaster to be reappraised at its market value immediately after the disaster, giving taxpayers a possible outlet for relief.[2]

Louisiana has a similar property tax time period for when properties are valued and when the tax bills are payable.[3] Likewise, Louisiana provides that land or property (real or personal) damaged or destroyed by a disaster or governor-declared emergency may be reassessed during the year in which damage occurred at the percentage of fair market value taking the damage caused into consideration.

Not all states have statutory redress for taxpayers with nature-inflicted property damage, however. South Carolina, which was battered by Hurricane Matthew last year, generally does not provide special tax treatment for real property and improvements that have been damaged or destroyed unless they have sustained fire damage.[4] Similarly, North Carolina, which also took a hit during this hurricane, has a similar provision for property damaged by fire or explosion, but does not explicitly provide relief for hurricanes or other natural disasters. Nevertheless, after Matthew made its way through the Carolinas last year, both states offered to waive and interest for taxpayers who were unable to make timely payments in counties that were declared disaster areas.[5]

Options for tax relief in areas heavily damaged and left uninhabitable by storms or flooding may seem inconsequential. But for those who are able to salvage their homes, businesses, and personal property, a property tax savings could perhaps be a small step toward rebuilding.     

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Does your state offer property tax relief for real and personal property destroyed by natural disasters?

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[1]  See, e.g., Tex. Tax Code Ann. §§11.43 and 23.01.

[2] Texas Tax Code Ann. §23.02.

[3] La. Rev. Stat. Ann. §§47:1952 and 47:2127.

[4] S.C. Code Ann. §12-39-250.

[5] See Important Notice: Expanded List of Counties Eligible for Hurricane Matthew Tax Relief. See also South Carolina Dept. of Rev., Hurricane Matthew Tax Relief.