Temporary Disaster

 

TEMPORARY EXEMPTION FOR DISASTER DAMAGE 

Tax Code Section 11.35 allows a qualified property that is at least 15 percent damaged by a disaster in a governor-declared disaster area to receive a temporary exemption of a portion of the appraised value of the property.

A property owner must apply for the temporary exemption no later than 105 days after the governor declares a disaster area.

Declaration date:
Governor Abbott declared the entire state of Texas a disaster area on February 12, 2021.

Deadline for application:
The deadline for filing the application for the exemption is May 28, 2021.

Link to application: http://comptroller.texas.gov/forms/50-312.pdf

Return the completed application with additional documents (Section 5: of the application) to:

Hood Central Appraisal District
P O BOX 819
1902 W. PEARL STREET
GRANBURY, TEXAS 76048

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Qualified property includes:
tangible personal property used for income production;
residential buildings (homes), commercial buildings (businesses), industrial buildings (manufacturing), multi-family buildings (apartments), and other real property buildings; and
certain manufactured homes.

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. The appraisal district may rely on information from a county emergency management authority, the Federal Emergency Management Agency (FEMA) or other appropriate sources like insurance adjusters or repair estimates when making this determination.

Level Damage Assessment Damage Description Exemption Percentage
I 15% < 30% Minimal, may continue to be used as intended 15%
II 30% < 60% Nonstructural damage and waterline <18″ above floor 30%
III 60% < 100% Significant structural damage and waterline 18″+ above floor 60%
IV 100% Total loss; repair is not feasible 100%

The amount of the exemption is determined by multiplying the building 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 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.

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 proration factor for this disaster is 0.88 (322/365 = 0.88).

Sample disaster exemption calculation:
A $100,000 house 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