HCAD is sending 2019 value notices to many properties damaged during Hurricane Harvey. If you had a residential homestead exemption and your value was lowered last year because your home was being repaired, this year’s appraised value would be based on the value of the property before the damage occurred as required by the Texas Property Tax Code.
The example below demonstrates the effect on the appraisal cap in those rare instances where the value of the property has increased more than 20 percent since Hurricane Harvey. This is typically due to a combination of completed repairs and market appreciation. HCAD lowered many values in 2018 due to the damage from the hurricane. The appraised value is calculated based on Section 23.23(f)(1) of the Texas Property Tax Code after repairs are made.
If you had a property with an appraised value of $300,000 for tax year 2017 and that property was then damaged during Hurricane Harvey; and
If that property’s value was reduced as of January 1, 2018 because the repairs were not complete; and
If the repairs were completed as of January 1, 2019, and the market value increased to $370,000; then
The appraised value for 2019 would be calculated using 2017’s appraised value plus an increase of 10 percent per year.
$300,000 x .10 = $30,000 $300,000 + $30,000 = $330,000
$330,000 x .10 = $33,000 $330,000 + $33,000 = $363,000
So the appraised value for 2019 would be $363,000, which would represent the 10 percent increase each year from the 2017 appraised value of $300,000.
If HCAD did not use the 2017 value, the damaged property would remain capped at a lower value than other non-damaged properties. The 2018 appraised value of $150,000 would then cap the 2019 appraised value at $165,000 while the other non-damaged properties would be capped at $363,000. This allows HCAD to treat all properties similarly.