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updated: 4/29/2013 7:49 PM

How Kane County flood victims can get property tax breaks

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Kane County residents who experienced significant flood damage might be in line for a tax break as they try to rebuild. But those breaks won't ease those homeowners' tax bill pain this week despite their property's loss of value.

The first thing property owners can do to mitigate some of their losses is apply for a reassessment of their home. Flood damage can result in a major change in assessed value if property owners can prove the damage was caused by the recent flooding.

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A drop in assessed value would then apply to the taxes the property owner would pay in 2014 -- not, unfortunately, to the bills that are coming in the mail this week.

"Everything that would be changed would be for the taxable year in which the disaster takes place," Kane County Supervisor of Assessments Mark Armstrong said. "In Illinois we pay the tax bill one year after the assessments. So nothing positive that happens from this can in any way impact the bill that is going to go out this week."

Armstrong cautioned that property owners who thwarted the law in building or remodeling their homes will not be eligible for a reassessment.

"What we found during the big flood in 2008 was people would call and say, 'I want an assessment reduction because the flood filled my basement, and I had to tear it out.' The problem was we found a lot of people had finished their basements without a permit. As a result, it was never part of their assessment in the first place. We can't take something off their property assessment if it's never been on."

There is also a second tax benefit that may come to property owners who suffered flood damage. Those owners can also apply for a Natural Disaster Homestead Exemption.

The exemption is open to owner-occupied residential property. The exemption, which was created last year, allows property owners to replace their damaged homes with new construction without the penalty of a much larger tax bill.

The structure must be rebuilt within two years of the disaster and can't be more than 110 percent larger than the square footage of the previous home.

While the law is clear for entirely new homes, Armstrong said his office will have to wade through the legalities of applying the exemption to homes that are only partially rebuilt.

"I'm not sure the statute is clear on that," Armstrong said. "Generally, if someone is just rebuilding part of the house, let's say a basement, that's generally not something that would fall within the Natural Disaster Homestead Exemption. The law is if your house is more than 50 percent destroyed, you can't just rebuild the house. You have to build a new house that is up to modern code. Your grandfathering is no longer in place."

But the law gets murky for rehab projects that are less than 50 percent of the existing structure, Armstrong said.

Either way, Armstrong's office will work off a list of flood-damaged homes provided by the Kane County Office of Emergency Management to determine eligibility.

"I don't think we're going to have a lot of these exemptions, but this is the first time we've applied it," Armstrong said.

If successful, the Natural Disaster Homestead Exemption would then apply to the tax bill payable in 2014. It would apply as long as the current owner of the home keeps ownership and occupies the property.

Armstrong urged flood victims to get moving on applying for the reassessments and exemption as soon as possible. Application forms are available on Armstrong's website, kanecountyassessments.org/flooddamaged.pdf. Additional assistance is available by calling Armstrong's office at (630) 208-3818.

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