If you saw significant damage during last week’s disaster, you could save money on your 2021 property tax bill through a temporary exemption for 2021.
Here’s how it works and who should apply.
Exemption Process is New Since Hurricane Harvey
In the last legislative session, Texas lawmakers passed a law that allows property owners to apply for a temporary property tax exemption once the governor declares a disaster.
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“It replaced the re-appraisal process on disaster properties that had previously been in place. Now, it is handled as an exemption,” explained Collin Central Appraisal District Chief Appraiser Bo Daffin.
The appraisal district for Collin County announced the exemption and published the form on Wednesday, but the exemption is available to qualifying property owners in all Texas counties following Governor Greg Abbot’s Disaster Declaration on Feb. 12.
Damage Must Add Up to At Least 15% of Home or Building Value
“If you just had to have a plumber come out and you're spending a couple of thousand dollars to get it fixed, this exemption is probably not going to help you. It's easy to do so you might apply for it, just in case. But, if you really sustained a lot of damage, mainly with flooding, that's probably where this is going to start kicking in for you,” explained Glenn Goodrich with Property Tax.io
Collin County says it’s calculating the damage percentage against the appraised value of the house or building – not the building and land together.
Property tax consultant Will Wiggins with North Texas Property Tax Service said the law doesn’t stipulate the building would be considered on its own, but he agrees it is the fairest approach in this disaster.
“This is a percentage-based adjustment and so we want to focus just the quantity of value on the improvements and leave out the land,” Wiggins said.
Wiggins explained that if your total appraised value is $250,000 and $200,000 is the appraised value of the house (listed as the improvement on your appraisal notice), the damages would have to total $30,000 to meet the minimum 15% threshold.
In that example, the taxable value would decrease by $26,400 for 2021. That is a decrease in the taxable value and not the tax rate – which is set by taxing entities like school districts.
Tax rates vary across North Texas, but using the above example, Wiggins said a property owner could save several hundred dollars on their property tax bill. “$600 or $750, but that’s significant,” said Wiggins. “We need all the help we can get.”
How to Apply
The exemption is not automatic. Property owners must apply.
The deadline for the application is May 28 which is 105 days after the governor declares a disaster. Check with your appraisal district for the forms.
Tarrant Appraisal District published its information here.
You can access Collin Central Appraisal District forms through a downloadable link here.
“Provide all of the supporting data you can - including insurance forms, your contractor estimates and contracts, receipts, pictures, anything that the owner believes supports their case,” said Daffin.
Though the deadline is three months away, Daffin wants property owners to be aware of the exemption and save copies of documentation – including the cost of emergency steps taken in the early days of the disaster.
“If I had to do some work on my own to try to protect my house, I would want to save those receipts to show: here were the steps that were taken, here are the costs that can be documented,” said Daffin. “Then, it becomes a math problem of looking at the value and comparing those costs to see if that calculates to at least a 15% damage rating.”
Qualified properties include homes, commercial buildings, industrial buildings and multi-family along with income-producing business personal property.
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