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
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
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.