TEXAS CITY — Millions of dollars in property value are in question because of a dispute between the county tax assessor and the central appraisal district on how severely houses that have been rebuilt since Hurricane Ike should be appraised.
The chief appraiser argues that, in most cases, homesteads that were rebuilt or repaired after the storm could have property values returned to pre-Ike levels — even though their values this year dropped significantly.
But County Tax Assessor-Collector Cheryl Johnson argues state law prohibits the appraisal district from valuing any homestead at more than 10 percent of its 2009 appraised value.
After Hurricane Ike, hundreds of properties across the county saw their values drop, many by as much as 90 percent.
In some cases, especially on the Bolivar Peninsula and in Galveston where houses were washed away, the only value assessed in 2009 was on the land.
State law allows a homeowner to keep a homestead exemption for up to two years after disasters, including hurricanes and fires, Galveston Central Appraisal District Chief Appraiser Ken Wright said.
The law also sets limits on how much a homestead’s value can rise in a year, but Wright said that in the case of disasters, the appraisal district can go back and either start with the pre-disaster value or consider the rebuilt home to be new construction, especially on properties where the house was destroyed.
“If it is basically the exact same house, same square footage, same number of rooms, then that is not a radical improvement,” Johnson said. “It’s essentially your same house, and the law says you can’t increase its value by more than 10 percent.”
Johnson said that would include a home-owner who might have to meet new building codes and have added features required by law that would normally add value to a property. Those property owners should not be burdened with a dramatically increased property valuation, she said.
As an example, a home that was valued at $160,000 before Hurricane Ike but was severely damaged and had its value in 2009 lowered to $20,000 could not be valued at more than $22,000 when it is next appraised, Johnson said, citing the 10 percent cap.
Wright disagrees. He said the market value should be determined using that original $160,000 as a baseline.
“Essentially you would be letting that homeowner get away without having to pay his fair share of the property taxes if you did it the other way,” he said.
Wright and Johnson agree that should a homeowner add rooms and square footage, then the assessed value should include those additions.
The difference of opinion has implications for taxing authorities as they prepare their fiscal 2010-11 budgets.
The county is planning its budget based on the standard that values on homestead properties won’t increase by more than 10 percent.
But Johnson said she is worried that cities and school districts might budget based on values that are at or near pre-storm values.
She asked District Attorney Kurt Sistrunk to seek an attorney general’s opinion on the matter. The request was sent to Austin last month.
