Florida Treasure Coast Chinese Drywall Victims Get Tax Help

More Florida Chinese drywall victims are getting property tax breaks to help defray costs related to the defective drywall. Unfortunately while tax breaks for Chinese drywall damage are helpful, they will not be nearly enough to help victims of this disaster recover financially.

Florida has been the state hardest hit in the Chinese drywall debacle. According to the Consumer Products Safety Commission (CPSC), 1,522 drywall complaints have come from Florida homeowners. However, it is estimated that as many as 35,000 homes in the state may contain Chinese drywall.

According to TCPalm.com, Chinese drywall homeowners along Florida’s Treasure Coast, which comprises St. Lucie, Martin and Indian River counties, are the latest in the state to get property tax breaks. Property appraisers in those counties have reduced the 2009 values of 327 homes and condominiums with Chinese drywall because they say the properties might be worth significantly less than their purchase price. In St. Lucie, reductions to the structural value of homes have amounted to as much as 75 percent to 85 percent. Some homes in Martin have seen reductions of around 50 percent, and reductions in Indian River have come in at around 40 percent, TCPalm said. Depending on a home’s value, such reductions could amount to savings between $700 to $5,000.

While those savings do help, they are only a “drop in the bucket” compared to the financial damage Chinese drywall homeowners have sustained. The tax savings won’t come close to covering the cost of Chinese drywall remediation, which some have estimated could cost as much $100,000 per home. Many families have been forced out of their homes, and have been paying both mortgage and rent payments. They may also face big medical bills because of health problems that could be linked to the drywall’s fumes, as well as other miscellaneous costs.

There are other avenues of aid opening up for Chinese drywall victims, however. For instance, the IRS has said they may be eligible for a casualty-loss deduction on their federal taxes if they can prove they suffered “sudden, unusual and unexpected” damage because of the defective wallboard. The Department of Housing and Urban Development is also working on a plan that could make funds from the Community Development Block Grant program available to homeowners. Earlier this month, the U.S. House of Representatives overwhelmingly passed H. Con. Res. 197, which encourages mortgage lenders to provide temporary forbearance to Chinese drywall victims forced out of their homes so that they can avoid foreclosure. In November, the U.S. Senate unanimously passed a similar resolution.

Still, even all of these options likely won’t cover the staggering costs that Chinese drywall victims have incurred, and will likely continue to incur for some time. That’s why so many have chosen to become plaintiffs in the Chinese drywall litigation currently underway in federal court in New Orleans. Earlier this month, a massive class action lawsuit naming Knauf Plasterboard Tianjin Co. Ltd, one of the major manufacturers of Chinese drywall, as a defendant was filed in that litigation. That lawsuit alone involved nearly 2,100 plaintiffs in Louisiana, Alabama and Florida.

Bellwether trials are expected to begin in the Chinese drywall litigation in January. The first will involve a set of cases from Virginia, and another Chinese firm, Taishan Gyspum, which is actually controlled by the Chinese government. As we reported earlier this year, a default judgment has already been issued against Taishan for failing to respond to lawsuits.

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