Peter Dobelbower flipped when he opened an April notice from the Oklahoma County assessor’s office that showed his property taxes were going up $200.
Just last year, Dobelbower swallowed a $334 increase after his wife bought the northwest Oklahoma City property as a rental investment in November 2012. But he immediately appealed this year’s hike, which — despite a house fire that came a little more than a month after the purchase — included an additional 11.18 percent increase to the home’s taxable value.
By state law, increases to taxable value, on which counties assess and collect property taxes, are capped at 3 percent annually for primary residences and agricultural land and at 5 percent for rental and commercial properties — unless the property is sold or improved.
In Dobelbower’s case, the county assessor deemed the $75,000 in new wiring, plumbing and other repairs he made to their property at 4111 Holiday Place after the house fire as improvements.
“I felt like I suffered twice,” said Dobelbower, whose appeals to the county assessor and County Board of Equalization were denied.
“I had no other choice but to make the property livable, but I was penalized first by the fire, which was sparked by an electrical short when new carpet was being laid, and then by the tax hike, which would compound over years,” he said.
Property tax law
Dobelbower took his fight to state lawmakers, who on the last day of session this year passed legislation that stops property tax increases for owners who repair or rebuild properties injured through no fault of their own.
House Bill 3188, which lawmakers unanimously passed and Gov. Fallin signed into law June 2, statutorily excludes repairs and rebuilds due to “acts of God” from improvements subject to tax increases.
“The law isn’t retroactive, but went into effect by emergency order,” said state Rep. Jon Echols, R-Oklahoma City, who co-authored the bill. “So it will stop property tax increases in time for those whose homes were destroyed or damaged in the recent rash of tornadoes.”
“Right now is an important time in the metro for people to know about this law,” Echols said. “But this affects the entire state from hail storms to grass fires.”
After Oklahoma’s May 2013 tornadoes, 47,057 homeowners and 4,214 businesses filed insurance claims totaling nearly $786 million and $173 million, respectively, according to Kelly Collins Dexter, spokeswoman for the state Insurance Department.
The new law, Echols said, protects homeowners, regardless of whether they have insurance.
To be fair to counties that depend on property taxes to fund schools, roads and other projects, the bill excludes extra square footage that might be added in restorations, he said.
Paula Ross, spokeswoman for the Oklahoma Tax Commission, explained it this way: “A Moore tornado victim who suffered a total loss may choose to add an extra bedroom when they rebuild their totally new house. Under this new law, the property taxes on the original square footage would be subject to the annual cap, so homeowners aren’t being harmed by the storm for years to come,” Ross said.
“But the extra square footage would be assessed at the new house rate, so there’s no loss at the county level.”
Property values increasing
Despite last year’s Moore tornadoes, property values across Cleveland County are up, Cleveland County Assessor David Tinsley said.
“I think they’re up because of construction elsewhere, not in the path of the storm,” Tinsley said. But storm victims continued to pay property taxes on their vacant lots or on the percentages of their homes that were undamaged, he said.
Newer homes in south Oklahoma City are selling for $10,000 to $15,000 more than they did two or three years ago, Tinsley said. Moreover, vacant lots in the tornado area are selling for $10,000 to $15,000 over their county assessments, he said.
Tinsley said the state Constitution states county assessors must raise property taxes each year until assessment of properties match the market value of nearby properties. In 2012, Oklahoma residents voted to limit those increases to a maximum of 3 percent annually, until the assessments reach fair market value.
Senior freezes available
According to the Oklahoma Tax Commission website, property owners 65 and older are eligible for property tax freezes if their annual household incomes fall beneath yearly amounts set by the U.S. Department of Housing and Urban Development for their respective counties. In Cleveland County, that amount currently is $60,000. In Hayes County, it’s $44,003 and Choctaw County, $38,008.
Moreover, seniors statewide whose gross household incomes, excluding gifts, is $12,000 or less may be eligible for refunds of up to $200 on their annual property taxes. Full exemptions are available for disabled veterans and surviving spouses of disabled vets who meet qualifications.
Next legislative session, Rep. Bobby Cleveland, R-Slaughterville, said he plans to introduce legislation that would freeze property taxes for all seniors, regardless of income.
“Say your income drops from $200,000 to $80,000 after retirement. That’s still a nice income,” Cleveland said, “but it still will be difficult to pay property taxes, because they keep going up.”