Damaged or Destroyed Property

In Oregon, property owners are taxed on the assessed value of their property as of the assessment date, January 1. After the assessment date, property that has experienced a casualty loss due to either an act of God or a fire, may be eligible to receive a reduction in their tax. The reduction is referred to as a "proration of tax" and is computed by the county tax collector. The information in this circular will provide a general explanation of the occurrences that qualify for a proration of tax, where you may obtain an application for proration and where you file it, the deadlines for filing the application, a description of what adjustments are made to a qualifying account, and finally, how you would appeal a decision if you disagree with the disposition of your application.

What is a qualifying occurrence?

In the event any real or personal property is damaged or destroyed by an act of God or by fire, the property is eligible for a proration of the taxes. An act of God is generally considered an act attributable to nature without human interference. For example, damage from a tornado or a lightning strike would be considered an act of God. Damage would not be considered an act of God if it Is caused by the property owner. Any fire, whether caused by an act of God or not, is eligible provided that the applicant has not been convicted of arson with regard to the property for which relief is sought. You would be eligible for relief if, for example, your house bums down as the result of an accident or if you ask the fire department to burn it down for practice.

Who may apply?

The owner or purchaser under a recorded instrument of sale in the case of real property is eligible to apply. The person assessed, person in possession, or owner in the case of personal property is eligible to apply. All applications are made to the tax collector for a proration of taxes.

What is the deadline for submission of an application?

The law requires that the application be submitted to the county tax collector no later than the end of the tax year in which the damage or destruction occurs or 30 days (not one month), after the date the property was damaged or destroyed, whichever is later. The end of the tax year is June 30. If your property is destroyed by strong winds on November 1, you must file an application for proration by the following June 30. If that same property was destroyed on June 20, the application deadline would be 30 days later, or July 20.

Where do I get an application and with whom do I file it?

Applications are available in each county tax collector's office. in some counties, applications also may be available in the assessor's office. File you application with the county tax collector. The tax collector will consult with the assessment staff who will determine whether or not the property has been damaged or destroyed and how much value was lost.

How much loss in value is necessary for a proration of tax to be made?

Several factors may affect the answer to this question. First, there has to be a loss in taxable assessed value for a proration of tax to be calculated. For most accounts, the taxable assessed value is less than the real market value. If the damage or destruction causes the real market value of the property to dip below the taxable assessed value, then a proration of tax is calculated. For example, assume a home is totally destroyed by fire. It had a real market value of $120,000 and an assessed value of $100,000. The property was taxed based on $100,000 assessed value and the account would receive a proration of tax on the $100,000 loss in assessed value. The account would not receive a proration of tax on the $20,000 for which no taxes were computed in the first place.

If the loss in taxable assessed value generates a proration of under $10.00, and the tax has been paid, ORS 311.806 (5) says that a refund "shall not be required."

The appropriate amount of taxes will be canceled once the application has been processed. However, no refund will be issued unless there is an overpayment in the final taxes owed.

How is the refund calculated?

The tax collector uses the value determination of the assessment staff as a basis for recalculating your tax.

• Damaged property: For damaged property, the percentage of assessed value lost is multiplied by the total tax on the account for the month the property was damaged and for each month the property remained damaged during the tax year. If you repair the property before the end of the tax year, no credit is allowed for months after the repair. The tax collector refunds taxes overpaid or credits taxes owing for that year.
• Destroyed property. For destroyed property, the percentage of value lost is multiplied by the total tax on the account for each month following the month of destruction through the end of the year whether or not the property is repaired. The tax collector refunds taxes overpaid or credits taxes owing for that year.
• Subsequent year: Whenever property is damaged or destroyed between January 1 and July 1, a timely filed application for tax proration may entitle the taxpayer to a proration of tax for the subsequent tax year also. Check with the county tax collector in your county for more details. You must file your application for proration no later than the end of the tax year in which the property was damaged or destroyed or 30 days (not one month) after the date the property was damaged or destroyed, whichever is later. Applications filed for the tax year following the occurrence but missing the filing deadline will be denied.

Is the value on the account reduced?

The value on the account is not reduced. The law allows only a proration of the tax, not an adjustment to the value. The account value will always be the value of the account as of the assessment date for the tax year being assessed. When the account is revalued on the assessment date following the occurrence, any loss in value will be noted and reflected on the next tax statement.

If I disagree with the disposition of the applications can I appeal the decision?

A decision of the tax or assessment office is appealable to the Magistrates Division of the Oregon Tax Court. ORS 305-275 says, in part, that any person aggrieved by an act of the county assessor or tax collector may appeal to the tax court. Appeals must be filed within 90 days after the act or omission becomes actually known to the person, but in no event later than one year after the act or omission occurred.