Property taxes and mortgage are still due even if the house burns down after a disaster.

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As wildfires continue to devastate Los Angeles and other parts of the country in early 2025, homeowners are facing daunting financial questions in the wake of such disasters. The implications for property taxes and mortgages are significant, and understanding the process can provide some clarity during these trying times.

In January 2025, fires in Los Angeles led to the destruction of thousands of homes. When a house burns down, the property itself may be gone, but the mortgage remains. Homeowners must continue to make mortgage payments, even if their home is no longer habitable. This obligation can be a harsh reality for many affected families.

Tax assessments, however, do change. Los Angeles County Tax Assessor Jeff Prang has indicated that property assessments will be reduced following such a calamity, though this reduction does not apply to the land itself. Given that the land often holds significant value, especially in areas like Southern California, this distinction is crucial. Homeowners are encouraged to apply for Misfortune and Calamity Tax Relief to potentially defer property taxes.

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The federal landscape also plays a role. In 2024, the United States experienced 27 billion-dollar weather and climate disasters, with damages exceeding $182.7 billion. This context highlights the widespread nature of such events and the importance of disaster preparedness and financial resilience.

Mortgage servicers may offer options to delay payments, providing temporary relief for homeowners. Yet, it’s important to remember that these payments are only postponed, not forgiven. Homeowners must work closely with their lenders to understand their options and ensure they are prepared for future obligations.

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Ultimately, navigating the aftermath of a house burning down involves a complex interplay of continuing mortgage payments, applying for tax relief, and working with lenders to manage deferred payments. Each step requires careful consideration and proactive engagement with relevant authorities.

Sources:

If you lost your home in a wildfire, what happens to your mortgage and property tax?: https://ktla.com/news/california/wildfires/if-you-lost-your-home-in-a-wildfire-what-happens-to-your-mortgage/

2024: An active year of U.S. billion-dollar weather and climate disasters: https://www.climate.gov/news-features/blogs/beyond-data/2024-active-year-us-billion-dollar-weather-and-climate-disasters

Natural Disaster Facts and Statistics 2025 – Forbes Advisor: https://www.forbes.com/advisor/homeowners-insurance/natural-disaster-statistics/


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