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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.
No. Household furnishings are not assessed for property taxes and therefore do not qualify for property tax relief.
If the leaks are due to the age and normal deterioration of the existing roof, the leaky roof won’t qualify you for property tax relief. However, if your roof was damaged by a falling tree or heavy winds and the damage exceeds $10,000, you may qualify for tax relief.
Yes. Tax reduction is available for all damaged taxable property, including boats, aircraft or other business personal property.
All California counties, except for Fresno County, have adopted an ordinance 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 under section 170, 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.
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.
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.
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.
Please contact your county assessor’s office for an application.
Under section 69.3, 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 December 2012, there are ten counties that have such an ordinance: Contra Costa, Los Angeles, Modoc, Orange, San Francisco, Santa Clara, Solano, Sonoma, 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.
Depending upon the year in which the replacement property is purchased, the market value of the damaged property is adjusted up to 115 percent when comparing with the replacement property. 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 within three years of the purchase of the replacement property.
If the market value of the replacement is within 120 percent of the market value of the property substantially damaged or destroyed, the factored base year value of the damaged or destroyed property will be transferred to the replacement. (R&T 69(b)(1))
If the market value of the replacement is more than 120 percent of the market value of the property substantially damaged or destroyed, the base year value of the replacement will be the factored base year value of the damaged or destroyed property plus the amount by which the value of the replacement exceeds 120 percent of the value of the property that was damaged or destroyed. (R&T 69(b)(2))
| Market value of damaged or destroyed property = |
$220,000 |
| Replacement property value allowed for transfer of FBYV (120% * $220,000) = |
$264,000 |
| Scenario 1: |
Market value of replacement property = |
$253,000 |
|
$253,000 is less than $264,000 |
|
|
New assessed value of replacement property = |
$150,000 |
| Scenario 2: |
Market value of replacement property = |
$275,000 |
|
Excess market value ($275,000 – $264,000 = $11,000) |
|
|
New assessed value of replacement property ($150,000+$11,000) = |
$161,000 |
| Scenario 3: |
Market value of replacement property = |
$125,000 |
|
$125,000 is less than the $150,000 FBYV of the original property |
|
|
New assessed value of replacement property = |
$125,000 |
If the market value of your replacement property is LESS than the factored Prop 13 value of your original property, the replacement will be assessed at its lower market value, (see Scenario 3 above). There is no need to file a claim form.
No. A disaster declaration must have been issued by the Governor for the event that caused the damage (R&T 69(c)(3)).
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.
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
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.
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.
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.
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.
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.
