Officials: Pandemic economic losses do not trigger tax relief

Amid the coronavirus pandemic, homeowners in Harris and Montgomery counties received 2020 property value notices in May from their respective county appraisal districts. In some areas of the Lake Houston area, property appraisals increased by as much as 11% year over year.

Kingwood saw a 4% increase in value, Atascocita saw a 6% increase and Humble saw an 11% increase, according to Harris County Appraisal District data. Additionally, Montgomery Central Appraisal District data shows the values in the New Caney and Porter municipal utility districts increased 24% and 7%, respectively.

Although a disaster declaration has been made for the state of Texas, that declaration is not going to trigger property tax relief, Attorney General Ken Paxton said in an April ruling.

After Hurricane Harvey hit in August 2017, the Texas Legislature passed a law that allows property damaged in a natural disaster to have exemptions applied to home values that could range from 15%-100%. In his ruling, Paxton said the law only applies to physical damage, not economic loss.Across Texas, more than 2.68 million Texans have filed for unemployment since mid-March, according to Texas Workforce Commission data.

“Purely economic, nonphysical damage to property caused by the COVID-19 disaster is not eligible for the temporary tax exemption provided by [that section] of the Tax Code,” Paxton wrote.

State Sen. Paul Bettencourt, R-Houston, who authored the 2019 bill Paxton referenced, said he was not surprised by the ruling.

“That’s the real issue with what we’re facing now,” Bettencourt said in an April 22 phone interview. “It’s purely economy activity damage.”

HCAD spokesperson Jack Barnett said 2020 home values were assigned based on data gathered prior to the economic downturn. Any change in value caused by the pandemic will be reflected in 2021 values, he said.

Meanwhile, similar issues are happening in Montgomery County. Montgomery County Chief Appraiser Tony Belinoski said legislative action would be needed to deviate from its current system of assigning property values on Jan. 1 of each year.