Property Tax Post: Owners of California Property Damaged by Wildfires Eligible for Tax Relief


Wildfire

As of Aug. 1, 2018, the Carr Fire in Northern California has killed six people and destroyed over 1,000 homes. Elsewhere in the state, there are currently 15 other uncontained wildfires. Owners of property damaged by these wildfires may be eligible for property tax refunds.

California authorizes its counties to provide reassessments of damaged or destroyed property where the damage or destruction was caused by:

  • a major misfortune or calamity, in an area or region subsequently proclaimed by the governor to be in a state of disaster;

  • a misfortune or calamity (regardless of whether it is major, minor, or in an area or region subsequently proclaimed by the governor to be in a state of disaster); or

  • a misfortune or calamity that, with respect to a possessory interest in land owned by the state or federal government, has caused the permit or other right to enter upon the land to be suspended or restricted.

“Damage” includes a diminution in the value of property as a result of restricted access to the property. A county may provide relief for any combination of the above circumstances, except that a county providing relief for possessory interests in state and federal land must also provide relief more generally for other property damaged by misfortunes or calamities. In order to qualify for reassment, the property’s value must have decreased by at least $10,000 as a result of the damage or destruction.

Every California county, other than Fresno County, has adopted an ordinance providing for reassessment in some or all of the above circumstances. Shasta County, where the Carr Fire is still burning uncontained, provides for reassessment in all of the above circumstances. In this county, and other counties that do not offer later filing deadlines, property owners have 12 months from the date of the damaging misfortune or calamity to file for a reassessment of their property’s value.

Should tax relief be extended for homes rendered temporarily unusable by damage to public utilities? Could the homeowners be considered to have “restricted access” to their homes in this instance? Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn.

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