According to Latimes.com, if your home or business was damaged or destroyed in recent wildfires, you may qualify for significant property tax relief. Whether you choose to rebuild or relocate, there are opportunities to reduce your tax burden both immediately and in the long term. Here's a comprehensive guide to navigating property tax relief options and ensuring you take full advantage of the benefits available.
Immediate Steps for Property Tax Relief
If your property has sustained $10,000 or more in damages, your first priority should be filing the "Property Damaged or Destroyed by Misfortune or Calamity" form (ADS-820) with the Los Angeles County Assessor’s Office. This form initiates the reassessment process and can significantly lower your property’s taxable value during recovery.
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Deadline to File: You have until January 2026 to submit the form.
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Temporary Reassessment: Once approved, the taxable value of your property will be reduced to reflect the damage—typically, only the land value is considered if the structure is destroyed.
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Tax Payment Deferrals: Thanks to an executive order from Governor Gavin Newsom, you can defer your property tax payments until April 2026 without penalties. For longer-term deferrals, you can apply through the Los Angeles County Treasurer and Tax Collector, with options available for up to four years.
Rebuilding Your Home: Maintaining Your Tax Advantage
California’s Proposition 13 offers unique protections for property owners, allowing you to maintain your home’s pre-disaster taxable value if you rebuild.
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Rebuilding the Same or Up to 20% Larger: If you reconstruct your home to similar specifications or expand it by no more than 20%, your taxable value remains unchanged. For example, a property with a market value of $1 million and a taxable value of $600,000 would retain its $600,000 taxable value after rebuilding.
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Modern Upgrades: You can upgrade your home to meet modern fire codes and standards without triggering a higher assessment, provided the changes remain within the allowable limits.
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Beyond 20% Expansion: If you build beyond 20% of the original size or add new structures, such as an accessory dwelling unit, the additional value will be assessed at current market rates.
Moving Instead of Rebuilding
If you decide to relocate instead of rebuilding, there are several options to transfer your property tax benefits, even if you’re purchasing a more expensive home.
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Staying Within L.A. County: You can retain your previous taxable value entirely if the new home’s market value is no more than 20% higher than your prior property.
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Example: A home with a $1 million market value and a $600,000 taxable value allows you to purchase a $1.2 million home and maintain the $600,000 taxable value.
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If the new home’s market value exceeds 20%, the excess is added to your taxable value. For instance, a $1.3 million home would have a taxable value of $700,000.
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Relocating Within California: Under state law, you can transfer your taxable value to a home in another county, provided the market value of the new home does not exceed the market value of your previous property.
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Additional Benefits in Select Counties: Some counties offer enhanced tax relief for disaster-affected homeowners. Check with your destination county for specific programs.
Important Notes
You can only claim property tax relief for either rebuilding or relocating, not both. Carefully consider which option aligns best with your long-term plans and financial goals.
Resources and Support
Navigating property tax relief can be complex, so it’s essential to connect with the right resources:
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Los Angeles County Assessor’s Office: Staff are available at disaster centers in Los Angeles (UCLA Research Park West, 10850 W. Pico Blvd.) and Pasadena (Pasadena City College Community Education Center, 3035 E. Foothill Blvd.). Filing the ADS-820 form ensures you’re on the path to relief.
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Avoid Scams: Be cautious of third-party companies promising additional tax relief for a fee. According to Assessor Jeff Prang, these services cannot provide any benefits beyond what’s available through the county’s official programs.
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State Resources: Additional information is available on the websites of the Los Angeles County Assessor’s Office and the California State Board of Equalization.
By understanding and acting on these property tax relief options, you can reduce your financial burden and focus on rebuilding your life after the devastation of the wildfires.
Source: Latimes.com
