Tax Lawyer Blog

A Blog written by the Tax Attorneys for Individuals and Businesses

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.

Tax Extensions Available to Victims of California Wildfires

Earlier today, the IRS announced that victims of the California wildfires have been granted extensions to file certain individual and business tax returns.

Tax filing extensions

Most tax filings and payments due as of October 16, 2017 have been extended to January 31, 2018. This includes:

  • Quarterly estimated tax payments (including those due January 16, 2018)
  • Tax exempt organization returns with extensions that expire November 15, 2017
  • Quarterly payroll and excise tax returns normally due October 31st

The IRS is also waiving late-deposit penalties for federal payroll and excise taxes due from October 8 -23, so long as payments are made by October 23rd.

Taxpayers who received an extension to file their tax return until October 16, 2017 also have until January 31, 2018 to file (note that since payment was due last April, there is no tax relief available for payment).

Who qualifies?

Individuals and businesses in the California Counties of Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba qualify for this tax relief, and the IRS may extend it to other localities. Firefighters and relief workers working with a recognized government or charitable organization, regardless of where they live, also qualify for the extension.

The tax relief should be automatic

This tax relief should be automatically applied to you if you reside in the areas listed above, and there is no need to contact the IRS. However, if for some reason you receive a late filing or late penalty notice from the IRS, you should call the number on the notice to have the penalty removed.

If you do not live in one of the areas listed above, but have tax records located there, or are a firefighter or relief worker and cannot file on time, there may be relief available.

In our next post, we will cover disaster-related casualty losses and federal disaster grants. In the meantime, here are links to IRS information and publications relating to disaster relief for individuals and businesses: