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Property tax `damage’ eased after fire, flooding

Carrie Click

Regional property owners victimized by recent fires and floods are facing many financial hardships. However, county assessors are equipped, when appropriate, to ease these victims’ property tax burdens. Local Realtors report that summer real estate sales have been brisk, which in turn helps maintain property values. But assessors acknowledge that disaster victims’ properties need to be valued at a fair level, which considers values following a damaging fire or flood. This summer, the Coal Seam Fire in Glenwood Springs and the Panorama Fire in Missouri Heights, and subsequent mudslides on Mitchell Creek, damaged or completely destroyed residential property. In light of these disasters, county assessors modify tax rates to reflect the true value of the damaged property. “In the case of property that’s been completely demolished by fire, we prorate the taxes as of Jan. 1 of every year,” explained Garfield County Assessor Shannon Hurst. Prorating means the owner of a home leveled by fire on, for example, June 15, will only pay a tax rate based on the number of days when the home actually existed. The total yearly tax is divided by 365 days, then multiplied by the actual days the home existed.The homeowner is not liable for property tax on the home for the remainder of the year, and tax is only assessed on the land that remains. Typically, Hurst charges one-third of the regular residential rate on the vacant land for up to two years until structures are rebuilt. However, property owners who rebuild in the same spot within a year incur property taxes at the same rate as if the damage never took place. “Jan. 1 is our magic date for assessing value,” said Hurst.In cases of partial damage, assessors determine the extent of damage on a case-by-case basis, and tabulate the tax on what remains of the structures.But there’s no hard and fast formula for determining such value.”We can’t go out and look at a piece of property and say that since a home is 10 percent destroyed that we’ll deduct 10 percent off the property tax,” said Mark Chapin, deputy assessor for Eagle County. “There are other factors that we have to consider in each situation.”Part of the reason there are no pre-determined formulas for tabulating property tax is because assessors must consider issues such as market values, inflation and desirability of the location of the property.”Look at Malibu, for example,” Chapin said of the Southern California coastal community, which has withstood fires and floods and still manages to maintain high property values.Chapin explained that Malibu could slide into the ocean tomorrow, but as long as people still want to pay top dollar and risk losing their homes, the market demand there keeps property values high.Chapin said this is not a new phenomenon. Throughout the country, people will endure disasters such as earthquakes, tornadoes and floods, only to rebuild exactly where their houses were destroyed.”Look at history,” he said. “From the Dustbowl in Oklahoma to the fires and floods taking place now in our area, regions can experience major negative impacts from Mother Nature, but still maintain value.”Judging from housing sales, Realtor Mytt Anderson of Bray & Co. in Glenwood Springs said she hasn’t seen any change in the market this summer, even with the fires and floods. “I don’t feel it’s slowed down,” she said. “We’ve had a very busy summer.”In fact, in her experience, Anderson hasn’t felt that disasters have adversely affected the regional market. For instance, she says she didn’t notice any shift in the market in 1994 after the Storm King Fire, which made national news when 14 firefighters lost their lives near Canyon Creek west of Glenwood Springs. She did feel there was a slight shift, like “everyone was catching their breath,” she said, after the Sept. 11 disasters, but not on a level that affected real estate values.”The demand here is consistent,” she said.That demand remains high, even with the Coal Seam Fire destroying 29 homes in June, and the Panorama Fire taking three in July. This past Tuesday, a flash flood ravaged the Mitchell Creek area in West Glenwood, pushing mud into several driveways, and damaging several vehicles, homes and outbuildings.”We play somewhat of a waiting game with the market,” Chapin said, explaining that as long as banks continue to lend money for mortgages, and people still want to make their homes here, assessors will continue to watch the real estate market and let the buyers determine value.”It really boils down to what the market will bear,” he said.


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