Tax Lawyer Blog

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Property Tax Relief for Northern California Homeowners, Part I

The October 2017 wildfires had a devastating impact on Northern California counties, with more than 8,400 structures destroyed, 42 people dead, and over $1 billion in damages. If you are one of the victims of this recent catastrophe, make sure that you are taking advantage of the substantial property tax relief available to you.

 

Overview of property tax relief

California Revenue and Taxation Code (R&TC) Section 170 provides relief from property taxes for victims of natural disasters, with additional assistance for individuals whose properties are located in counties declared under a state of emergency. If damage to your property exceeds $10,000, there are several types of relief available:

  1. A temporary property tax reassessment due to your property’s decline in value, which will lower your tax bill while you are making repairs or rebuilding.
  2. A transfer of your property tax base year value to a new property should you choose to relocate.
  3. A deferral of property tax payments without incurring penalties or interest.

Note that some counties provide this relief to homeowners automatically, particularly in federally and/or state declared disaster areas. Others require that you apply for reassessment within one year.

 

Who qualifies for property tax relief?

Property tax relief is available to owners of real property, mobile homes that can be assessed for property tax purposes, business fixtures and equipment, orchards or other agricultural groves, boats and aircraft.

 

Filing a claim

Unless your county assessor is granting automatic deferrals (this may be the case if a large number of homes in your area were damaged), the first thing you need to do to obtain property tax relief is file a disaster claim for a tax reduction and postponement of your next property tax installment.

Claim forms are specific to each county but generally must identify the nature and extent of the damage, including an estimate of the cost to repair or replace the property, and a description of the property before and after the loss.

Contact your county assessor to verify if an application is required, or whether relief is being granted in your area without having to make a claim. If you must file, the application deadline is generally one year from the date of the damage/destruction or within the time frame specified through a local county ordinance. R&TC Section 194.1 states that as long as you filed your application in good faith, you will receive a deferral of property tax payments without penalties or interest until 30 days following receipt of your adjusted bill.

If you disagree with your county’s reassessment, you may appeal the notification of proposed value. The appeal must be filed within six months of the date of the notification, and will be followed by a County Appeals Board hearing.

 

Check first with your county assessor!

Note that delayed property tax payments may not be available in every county, and this relief is generally not available if your property taxes are paid through an impound account.

In our next two posts, we will cover property tax reassessments for rebuilds and relocation.

California Taxpayers Affected by Wildfires, Floods, and Mudslides Receive More Time to File, Pay | FTB Notice

 

 

FTB Newsroom

tel  916.845.4800 | Public Affairs Office

cell 916.203.6888 | Daniel Tahara Daniel.Tahara@ftb.ca.gov

California Taxpayers Affected by Wildfires, Floods, and Mudslides Receive More Time to File, Pay  

Sacramento — The Franchise Tax Board (FTB) today announced special tax relief for taxpayers impacted by Southern California wildfires, floods, and mudslides that began in December 2017. Affected taxpayers are granted an extension to file 2017 California tax returns and make payments until April 30, 2018.  

"California’s recent fires and mudslides have devastated communities, from the loss of lives and property to the displacement of families and workers,” said State Controller Betty T. Yee, who serves as chair of FTB. “Hopefully extra time to file and pay taxes can provide some minor relief to these fellow Californians.”  

FTB automatically follows federal postponement periods for any presidentially declared disasters.  

On Wednesday, the IRS granted relief to individuals and businesses in four counties: Los Angeles, San Diego, Santa Barbara, and Ventura. This applies to various tax filing and payment deadlines that occurred starting on December 4, 2017, including:   

  • Individual income tax returns normally due on April 17, 2018. 
  • Quarterly estimated tax payments due January 16, 2018.

The FTB will also follow these extended dates and will cancel interest and any late filing or late payment penalties that would otherwise apply.  

Disaster loss rules apply to victims in Governor-declared or presidentially declared disaster areas.

Taxpayers may claim a disaster loss in one of two ways: In the tax year that the disaster occurred, when filing a tax return this spring; or in the tax year before the disaster occurred by filing either an amended or original tax return. FTB can more quickly issue a refund for eligible losses claimed in the prior tax year.

For a complete list of all disasters declared by the Governor, see the “Qualified Disasters” chart on FTB’s Disaster Loss webpage.  Additional information and instructions are available in FTB Pub. 1034, How to Claim a State Tax Deduction for Your Disaster Loss.  Taxpayers claiming the disaster loss should write the name of the disaster in red ink at the top of the tax return to alert FTB to expedite the refund. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.

Yee also noted that disaster victims may receive free copies of state returns to replace lost or damaged ones. Taxpayers may complete Form FTB 3516, Request for Copy of Tax Return and print the name of the disaster in red ink (for example, Thomas Fire) at the top of the request.

Taxpayers impacted by other wildfires and hurricanes in 2017 may also qualify for tax relief. Additional information is available here.

Additional business tax relief for wildfire victims is available through the California Department of Tax and Fee Administration (more information is available here).

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FTB administers two of California's major tax programs: Personal Income Tax and the Corporation Tax. FTB also administers other non tax programs and delinquent debt collection functions, including delinquent vehicle registration debt collections on behalf of the Department of Motor Vehicles, and court–ordered debt. Annually, FTB’s tax programs collect more than 70 percent of the state’s general fund. For more information on other taxes and fees in California, visit taxes.ca.gov.