Property damaged by February 2021 Winter Storm Uri may qualify for new tax exemption

PRESIDIO COUNTY — The tax code in Texas allows areas where a disaster is declared by the governor to receive a temporary tax exemption for property that is at least 15% damaged by the disaster event. For Presidio County residents, those with damage from Winter Storm Uri, which hit in February, may be eligible for the tax exemption.

A property owner must apply for the temporary exemption, and the deadline for application is 105 days after the governor declares a disaster area. As it applies to Winter Storm Uri, Governor Abbott declared the entire state of Texas a disaster area on February 12, 2021, so this exemption applies to all counties in Texas. The deadline for filing the application for exemption is May 28, 2021.

The exemption applies only to qualified property, which includes tangible business personal property used for income production if the owner filed a 2021 rendition; an improvement to real property, which would include residential buildings (homes), commercial buildings (businesses), industrial buildings (manufacturing), multi-family buildings (apartments) and other real property buildings; and certain manufactured homes used as a dwelling.

The appraisal district determines if the property qualifies for the temporary exemption and assigns a damage assessment rating of level I, II, III or IV based upon available information. The district may rely on information from a county emergency management authority, the Federal Emergency Management Agency or other appropriate sources like insurance adjusters or repair estimates when making this determination.

Level I damage is assessed at 15% to less than 30% damage, described as “minimal, may continue to be used as intended, and offers a 15% exemption. Level II is 30% to less than 60%, which is “nonstructural damage and waterline <18″ above floor if flooded,” offering a 30% tax exemption.

Level III is 60 to less than 100%, where “significant structural damage and waterline <18″ above floor if flooded,” offering a 60% exemption. Finally, level IV damage represents a “total loss; repair is not feasible,” giving the property owner a 100% exemption.

According to the Presidio County Appraisal District, the amount of the exemption is determined by multiplying the building (note: this is the value for the structure only, land is not qualified property and land value is not included in the calculations) or personal property value, as applicable, by the exemption percentage based on the damage assessment level and is then multiplied by a proration factor (the number of days remaining in the tax year after the date the governor declares the disaster is divided by 365). The proration factor for this disaster is 0.88 (322/365 = 0.88).

The PCAD also offered a sample disaster exemption calculation: A $100,000 house (structure value only) received $20,000 in damage from burst pipes that resulted in nonstructural damage.

$20,000 Damage / $100,000 House value = 20%.  Damage assessment level is level 1. $100,000 House value times 15% exemption percentage = $15,000. $15,000 times proration factor 0.88 = $13,200 exemption amount reducing the taxable value for 2021.

The appraisal district must send written notice of the approval, modification or denial of the application to the applicant. The temporary disaster area exemption expires on Jan. 1 of the first tax year in which the property is reappraised.

The deadline for filing the 2021 Temporary Disaster Exemption application is May 28, 2021. You can mail your application Form 50-312 to the Presidio County Appraisal District P.O. Box 879 Marfa, Texas 79843 or via email to info@presidiocad.org.


Related