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An issue many times lost in the
confusion associated with damage to or destruction of real property
is the impact such events have on property taxes. Each year,
assessed values for real property are fixed as of January 1, and
each year after January 1 many property owners suffer damage to or
destruction of their property caused by fire, landslide, erosion,
environmental contamination, or some other misfortune. As property
owners consult their insurers and make preparations to rebuild,
restore, or remediate, many forget that their loss in value should
have a corresponding effect on their property tax liability.
Depending on the value of the property and the degree of damage, the
savings can be considerable.
Tax savings may also be available without damage or destruction of
property if the property is targeted as a potential condemnation
site. Consider, for example, the announcement not long ago by Metro
of the proposed North/South Light Rail route. With the publication
of proposed alternative routes stretching from the Columbia River to
Clackamas, hundreds of property owners suffered an immediate
reduction in property values because of the condemnation cloud
hanging over their properties. Few buyers of either commercial or
residential property are eager to acquire property that government
may soon condemn for a public works' project. It is especially
frustrating for such owners that years often elapse between
governments's initial announcement of the property's possible
condemnation, which affects the property's value, and government's
actual condemnation of the property, at which time the owner is
ultimately compensated for the loss of his or her property. Such
owners are entitled to reduced property tax bills during the time
their properties are less attractive to potential buyers.
Whether your loss in value is attributable to fire, landslide,
environmental contamination, government condemnation, or some other
catastrophic event, understand your options. Bad luck should cost no
more than it has to.
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