Residents who suffered a total or partial loss of their home from the wildfires which recently savaged much of Sonoma and Napa counties are entitled to property tax relief under Section 170 of the California Revenue and Taxation Code (the “R&T Code”). This provision authorizes county property tax assessors to revalue property in its current damaged condition, potentially resulting in a reduction in property tax liability and a partial refund of property taxes already paid.
This property tax relief is available to owners of assessable property (i.e., it is not available to property that is not assessable, such as certain mobile homes).
Generally, to qualify for any reduction the property must have suffered more than $10,000 in damage, and the owner must file a claim form with the county assessor’s office within twelve months of the date of the disaster. However, the Assessor’s Office for Sonoma County has indicated that, due to the scope of destruction, Sonoma County residents do not need to make this formal request because the county intends to conduct a comprehensive revaluation of all affected property on its own. This is not true in Napa County, where the assessor’s office is still requiring that a form be submitted prior to the county taking any action with respect to reassessment. Nonetheless, we would generally advise Sonoma County residents, particularly those with partial losses which may not otherwise be reported to the county, to file the claim form. Please see below for additional information and links to the relevant forms.
Once the reassessment has been conducted, the property’s Proposition 13 factored base year value will be reduced as of the date of damage or destruction. If a structure was completely destroyed, the value will be reduced to zero. It is not clear at this time whether land values will be similarly reassessed.
This relief is temporary. The value will be reinstated once the property is repaired or rebuilt. Importantly, if the structure is restored to its original condition, it will retain its original Proposition 13 base year value, even if the cost to repair or rebuild exceeds such amount. However, the value of any additional improvements (e.g., increase in square footage or the addition of a bathroom) constitutes additional value which will then be added to the original base year value.
Under R&T Code Section 194, affected residents may also request deferral of current property tax liability in conjunction with, or in addition to, the filing of the application for reassessment of property described above. The Napa County “Application for Reassessment of Property Damaged by Misfortune or Calamity” form provides residents an opportunity to make this request along with their general request for reassessment.
Affected residents are advised to coordinate property tax relief with their mortgage lender to the extent that property tax payments are made through an impound account. The California Board of Equalization has indicated that deferral is not an option if an impound account is in place.
Please see below for additional information:
Napa County Calamity Damage Reassessment Form: http://www.countyofnapa.org/calamityapp/
Sonoma County Calamity Damage Reassessment Form: http://sonomacounty.ca.gov/WorkArea/DownloadAsset.aspx?id=2147524453
BOE – Disaster Relief FAQ: http://www.boe.ca.gov/proptaxes/faqs/disaster.htm