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Texas Temporary Disaster Exemptions: What You Need to Know

 

Texas Temporary Disaster Exemptions: What You Need to Know

Texas weather is unpredictable. From deep winter freezes resulting in busted pipes to severe hurricanes and localized flooding, physical property damage is unfortunately common in the Lone Star State.

The good news? If your commercial, residential, or business personal property is physically damaged by a declared disaster, you may qualify for the Texas Temporary Disaster Exemption (Section 11.35 of the Tax Code), which can drastically reduce your property tax bill for the year.

Do I Qualify?

To qualify for this specific property tax exemption, your property must be located in an area that the Texas Governor officially declares a disaster area. Furthermore, the property must suffer direct physical damage.

  • What Qualifies: Structural or non-structural damage to the main improvements (e.g., busted interior pipes, flooded floors, roof damage from fallen limbs). You can qualify even if the damage is relatively minor and you continue to use the property.
  • What DOES NOT Qualify: Damage isolated to exterior amenities, such as busted sprinkler systems, fences, or exterior pool pumps, typically will not qualify on their own.

How the Exemption is Calculated

The law categorizes physical damage into four distinct assessment levels. The local appraisal district will assign your property to one of these levels, which determines the percentage of your tax exemption:

The 4 Damage Assessment Levels:

  • Level 1 (15% Exemption): Minimal damage. The property can still be used as intended.
  • Level 2 (30% Exemption): Nonstructural damage. For example, water damage from pipes requiring drywall and flooring repair.
  • Level 3 (60% Exemption): Significant structural damage requiring extensive repair.
  • Level 4 (100% Exemption): Total loss. The property is a total casualty and must be rebuilt.

The Math: The exemption is prorated based on the date the disaster was declared.
Calculation: Exemption Level % × (Days remaining in the year after Disaster declared / 365 Days) × Tax Rate.

For example, if you own a $1,000,000 commercial property that sustains Level 1 (minor) damage early in the year, assuming a standard 2.5% tax rate, this exemption could easily save you thousands of dollars in taxes for that calendar year.

What You Need to Do

If you believe your property qualifies following a storm or freeze, you must act quickly. The standard deadline to apply is 105 days after the Governor declares the disaster area.

To prepare your application, immediately gather the following evidence:

  • Time-stamped photographs of all physical damage
  • Repair estimates from licensed contractors
  • Insurance claims and adjusters' reports
  • Independent inspection reports

Need Help Filing for Your Exemption?

Don't leave money on the table after a storm. PropertyTaxes.Law can help you determine if you qualify, gather the appropriate evidence, and handle the formal exemption filing with your local appraisal district.

Contact Our Property Tax Consultants
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