Under Water and Over Appraised
How Hurricane Harvey Could Impact Your Property Tax Bill
Numerous properties in Texas and Florida are hurting in the wake of the Hurricanes, which could cost up to $180 billion in damages in Texas alone. Unfortunately, property owners are roughly a month away from receiving another costly punch in the gut – their 2017 property tax bills. Tax bills are based on property characteristics as of January 1st, which could be significantly different than they are now, having just experienced one of the most devastating natural disasters in American history.
What can be done to reduce the pain of recovery?
The tax codes provide owners a pathway for some relief through reappraisal of damaged properties. Unfortunately, the governing body of the taxing jurisdictions in a declared disaster area must request a reappraisal of damaged properties by the local county appraisers. This puts the taxing entities in a tough situation: help your local taxpayer or decimate your budget through reduced property tax revenue. Ideally, each taxing jurisdiction will do what’s right and request the reappraisal.
Once the reappraisal is requested, the counties will complete the process as soon as practical. Given the magnitude of the impacted area, this could take several months to complete. Property owners will not see the results/relief until months after the reappraisal when they receive their prorated tax bills.
Tax bills are prorated based on the declared disaster date. For impacted owners, this provides some level of relief.
Hypothetical example for Hurricane Harvey:
- Industrial warehouse in Cypress, TX - Tax Rate 2.84629%
- Warehouse assessed at $2,500,000 as of 1/1/17
- Disaster Declared Date 8/26/17
- Harris County Appraisal District (HCAD) is authorized to revalue affected properties:
- HCAD reassesses the warehouse at a value of $1,000,000 as of 8/26/17
What should you do?
In order to maximize your tax savings following the disaster, property owners will need to carefully:
- Document the damages
- Take pictures and estimate repairs
Even if you have flood insurance, you are still entitled to some relief based on the status of your property as of August 26, 2017.
We can assist you with any of your concerns regarding this matter. It is imperative that you reach out to us immediately if your commercial property suffered any damage as a result of the storm. While there is uncertainty surrounding the local governments’ use of the disaster section of the property tax code, there are other avenues that can be utilized to potentially achieve similar value reduction opportunities. We believe it is imperative the a review following a catastrophic event is done to ensure that your property is valued fairly.