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The California Constitution and Revenue and Taxation Code section 205.5 provide a property tax exemption for the home of a disabled veteran or an unmarried spouse of a deceased disabled veteran.
There is a basic $100,000 exemption or a low-income $150,000 exemption* available to a disabled veteran who, because of an injury incurred in military service:
- is blind in both eyes, or
- has lost the use of two or more limbs, or
- is totally disabled as determined by the United States Department of Veterans Affairs (USDVA) or by the military service from which the veteran was discharged.
An unmarried surviving spouse may also be eligible if the service person died as the result of a service-connected injury or a disease incurred while on active duty in the military. In other words, a veteran may not have been eligible during his or her lifetime, but the surviving spouse may become eligible for the exemption upon the veteran’s death.
The exemption is only available on a veteran’s principal place of residence. The home may only receive one property exemption. Thus, if a homeowners’ exemption has been granted on a property and the owner subsequently qualifies for the disabled veterans’ exemption, the homeowners’ exemption should be cancelled to allow for the disabled veterans’ exemption as it provides the greater benefit.
The issues regarding this exemption are complex, and the eligibility requirements are specific. Your local assessor’s office should be consulted for detailed requirements regarding these exemptions.
* Both exemption amounts are annually adjusted for cost of living index; as of January 1, 2014, the exemption amounts are $124,932 and $187,399 respectively
There are two areas in the disabled veterans’ exemption that provide for annual adjustments for inflation (Revenue and Taxation Code section 205.5, subdivisions (g) and (h)):
1) the exemption amount for the basic and low-income exemption; and
2) the household income limit for the low-income disabled veterans’ exemption.
For each assessment year, both the exemption amount and the income limit are compounded annually by an inflation factor based upon the California Consumer Price Index (CCPI).
The State Board of Equalization annually provides the exemption amounts and household income limits for the upcoming year and prior years in a Letter To Assessor which may be found at the Board’s website https://www.boe.ca.gov/proptaxes/ltacont.htm in the applicable year.
The United States Department of Veterans Affairs or the military service from which the veteran was discharged must have either:
- rated a veteran’s disability at 100 percent or
- rated the disability compensation at 100 percent because the veteran is unable to secure or follow a substantially gainful occupation.
In this discussion, totally disabled means the same as 100 percent disabled or a person with 100 percent disability rating.
The claim form, titled
Claim for Disabled Veterans’ Property Tax Exemption (BOE-261-G), must be filed with the county assessor where your property is located. The form may be obtained from the county assessor’s office, although some counties offer a downloadable form from their internet website. You may find the appropriate contact number for your county assessor’s office in your telephone book or from the Board’s property tax website under “Listings of County Assessors”:
/proptaxes/assessors.htm.
Your application must also include:
- Your letter from the United States Department of Veterans Affairs (USDVA) (or from the military service which discharged you), certifying that you have a service-connected disability rating of 100 percent or is compensated at the 100 percent rate due to individual unemployability ; and
- Between January 1 and February 15 to receive 100 percent of the exemption;
- Between February 16 and December 10 to receive 90 percent of the exemption;
- Anytime after December 10 of the current year to receive 85 percent of the exemption.Proof of honorable discharge (form DD-214) or other document indicating that you were discharged under honorable conditions.
For the
basic disabled veterans’ exemption, you need only file once. Once granted, the exemption is continuous unless you become ineligible because:
- the property is no longer being used as your primary residence (sold or rented), or
- title to the property in which the qualified claimant resides is no longer in the name of the veteran, the veteran’s spouse, or the unmarried surviving spouse, or
- you are no longer considered totally disabled as defined in Revenue and Taxation Code section 205.5, or
- you, as the surviving spouse of a deceased disabled veteran, have remarried, or
- the property is altered so that it is no longer a dwelling.
For the low-income disabled veterans’ exemption, annual filing is required to certify that your yearly household income for the prior calendar year does not exceed the maximum allowable income, as calculated, for the ensuing fiscal year.
No. Exemptions are only applied to ad valorem property taxes (a tax based on the value of property). Direct levies, special taxes, and special assessments are not property taxes under the law because they are not based upon the assessed value of the property. Most entities making such levies are completely independent, and while their revenues may be collected with your county’s property tax bills, the county itself has no jurisdiction over most of those levies or the agencies issuing them.
No. A disability rating of 100 percent is required to be eligible for the exemption. Unfortunately, there are no partial allowances for a rating less than 100 percent.
Provided that you still meet all the other requirements for the exemption, you would still be entitled to the exemption. The trustee takes only bare legal title to the trust property and does not become an owner in the normal sense, whereas you and your wife as the beneficiaries have an equitable estate in the trust property.
Yes. Revenue and Taxation Code section 205.5, subdivision (c)(1)(B), provides that if you are the unmarried surviving spouse of the veteran who died from a service-connected injury or disease, you are eligible for the exemption even though your husband did not qualify during his lifetime. You must provide a letter to your county assessor from the Veterans’ Administration certifying that your husband’s cause of death was a service-connected injury or disease.
No. Once you remarry, regardless of age, you will no longer qualify for California’s disabled veterans’ property tax exemption. There are some federal laws, however, that allow a surviving spouse to continue receiving federal benefits if they remarry after the age of 57.
Yes, the disabled veteran may receive the exemption even if the property is owned by the veteran’s spouse as separate property, as long as it is the veteran’s principle place of residence.
For the disabled veterans’ exemption, your domestic partner is not considered a spouse. Therefore, the exemption available to you would be up to 50 percent of your interest, or $90,000 in your case.
Upon divorce or death of a new spouse, the once qualified surviving spouse of a qualified veteran may again receive the disabled veterans’ exemption.
Yes, your home would qualify for the exemption. Section 205.5(b)(2) and (205.5)(c)(3) allows the exemption to continue on property that would have been a claimant’s principal place of a residence were it not for the fact the claimant was confined to a hospital or other care facility, provided the home is not rented out to a third party.
You are entitled up to the full amount of the basic ($100,000) or low-income ($150,000) exemption regardless of the percentage interest you hold in the property. The exemption is not reduced by 50 percent to $50,000 because you only have 50 percent interest in the property. However, the exemption amount may not exceed your share of the value of the home. For example, if the purchase price was $180,000, your 50 percent interest would only provide you with a $90,000 exemption (the lesser of $100,000 or one-half of $180,000). Only one exemption per property is allowed. If you are granted the disabled veterans’ exemption, the homeowners’ exemption is not available on the same property, even if a co-owner qualifies for it.
No. Pursuant to Revenue and Taxation Code section 276.3, when a property that was receiving a disabled veterans’ exemption is sold or transferred and the buyer is not eligible for the exemption, the exemption shall cease to apply on the date of that sale or transfer. Furthermore, termination of the exemption will be treated as an escape assessment and you will be responsible for the increased taxes (as prorated) since you do not qualify for the exemption that was in effect.
No. The exemption is only permitted for a principal place of residence. However, if you place a manufactured home or mobilehome on the land where you will live while your home is being built, then the property could qualify for the disabled veterans’ exemption. The exemption would first apply to the improvement, then to the land. If the mobilehome is subject to the vehicle license fee, the exemption is applied to the land only.
The disabled veterans’ exemption is allowed only on an owner-occupied residence. If you no longer live in your home, the exemption no longer applies. Your parents’ home would be eligible for the exemption only if you were also on the title as one of the owners.
Yes, all veteran’s benefits and social security benefits are included in the determination of your household income. The dependency and indemnity compensation (DIC) benefits paid to you for each dependent minor child are included in household income even though increased benefit payments are a result of the existence of such a child. They are benefits to which the surviving spouse is entitled to receive; they are not the dependent child’s separate benefit. However, any income received by the minor himself or herself should not be included in the calculation of household income. Please see the claim for exemption form, BOE-261-G, Claim for Disabled Veterans’ Property Tax Exemption, under “Instructions for Statements” to determine what constitutes “household income” in qualifying for the low-income disabled veterans’ exemption.
Yes, you are entitled to an increased exemption based on the difference between the two exemption amounts. You must re-file the claim form and follow the instructions on the first paragraph on the back side of the form under “Statements.”
Yes. The amount of the exemption, however, will be reduced by any existing exemption that may currently exist on the property and only to the amount of the supplemental assessment or the disabled veterans’ exemption, whichever is less.
Yes. One supplemental assessment was for the current fiscal year (July 1, 2005 to June 30, 2006) to reflect the change in value between March (the month after you purchased the home) and June 30, 2006. The second supplemental reflects the change in value from what was put on the roll as of the January 1, 2006 lien date for the ensuing fiscal year (July 1, 2006 to June 30, 2007).
Yes. The unused portion of your exemption may be applied to the regular roll. You must file with the county for a refund of taxes already paid.
No. If you already have a claim on file for the property on the current roll, you do not need to file again. The county assessor will assess the new construction and apply the $56,420 excess exemption amount ($161,420* – $105,000) to your supplemental taxes. If the assessed value of the new construction exceeds the excess exemption, you will be billed for the net supplemental taxes owed. * 2007’s low-income exemption, adjusted for inflation
Yes. Since you received 85 percent of the exemption on your regular bill and your supplemental bill was received after you filed for the exemption, you are considered to have timely filed on your supplemental bill. The remaining 15 percent of the exemption may be applied to your supplemental bill.
The effective date of the exemption on your new home is the date you move in, and termination of the exemption on your previous home is as of the date it no longer is your permanent place of residence. You must file form BOE-261-GNT, Disabled Veterans’ Exemption Change of Eligibility Report, with your county assessor to terminate the exemption on your old home and file a claim for your new home using form BOE-261-G.
As of January 1, 2007, a property that was previously owned, but not occupied by the qualified disabled veteran, may receive the exemption as of the date the property becomes eligible (when it becomes the veteran’s primary residence). Other mid-year eligibility may take place upon:
- purchasing a home in which a qualified veteran will live; or
- a veteran becoming eligible while already living in a residence; or
- upon the death of a serviceperson who died as a result of a service-connected injury or disease, whereby the spouse receives the exemption.
If your disability rating was effective prior to your buying your home, the exemption amount will be prorated from the date the property became eligible for the exemption. If your disability rating became effective after the purchase, the exemption will be prorated as of the effective date of your disability. Since you filed for the exemption timely, that is, before the next lien date (January 1, 2008), the full prorated exemption amount is available to you.
Yes. Revenue and Taxation Code section 276.1 provides that the retroactive period begins from the effective date of your disability rating. Rather than receiving a partial exemption when you file late due to the delayed disability rating, the full amount of the disabled veterans’ exemption may be granted. The county assessor will cancel or refund the amount of taxes, subject to a four-year limitation (Revenue and Taxation Code section 5097), including any interest and penalties, on your property’s assessed value that would have been exempt had you filed the claim timely. For a 100 percent exemption, you must file the claim with the county assessor within 90 days after you receive the disability rating, or on or before the next lien date, whichever occurs later.
Your exemption falls under the provisions of section 276.1, delayed disability rating. You are entitled to receive the full amount of the exemption as of the effective date of your disability rating, March 1, 2005. There is no proration of the dollar amount; thus, the $100,000 exemption in 2005 will apply to your 2004-2005 assessed value. Your property tax reduction, however, is prorated from the date the property became eligible for the exemption.
Your 2004-2005 prorated exemption and taxes would be calculated as follows:
$100,000 exemption / 365 days = $273.97 exemption/day
$273.97 exemption/day x 122 days eligible (March 1 ““ June 30, 2005) = $33,425 prorated exemption = $33,425 exemption amount
$122,000 assessed value – $33,425 exemption = $88,575 net taxable value
To receive 100 percent of the basic or low-income exemption as of the date the claimant or the property qualifies, the
initial claim must be filed between the date of qualification and on or before the next following January 1, or 90 days after the date of qualification, whichever is later.
For the low-income exemption only, a claim must be filed with your county assessor each year. Following the initial claim, subsequent annual filing periods are as follows:
- Between January 1 and February 15 to receive 100 percent of the exemption;
- Between February 16 and December 10 to receive 90 percent of the exemption;
- Anytime after December 10 of the current year to receive 85 percent of the exemption.
Annually, the county assessor will mail a notice, form BOE 261-GNT, to all taxpayers who received the exemption in the preceding year. When applicable, the claimant must return this notice and provide the reason for the change in eligibility. If there is no change, the taxpayer may ignore the notice. The notice also provides information on the qualifying and disqualifying conditions of the exemption, the annual adjusted threshold income limit for the low-income exemption, and the annually adjusted exemption amounts for both the basic and low-income exemptions.
If your previous property meets all the qualifications of the exemption, the disabled veterans’ exemption is available to you even if you already sold the property and no longer living there. Since you no longer own or live at the property, you must be able to demonstrate that you resided at the property during the periods you are seeking the exemption. Of course, refunds are only allowed up to the four years after the date of payment of taxes.
Claims for exemptions less than $111,296 require a one-time filing. The exemption will then be applied automatically every year thereafter. Claims for exemption amounts over $111,296 require an annual filing. The annual filing deadline is February 15.
Yes. California State law allows retroactive filings in some cases, subject to late-filing penalties.
Yes. The surviving unmarried spouse of such a veteran is eligible for the exemption. The surviving unmarried spouse of a veteran who, as a result of a service-connected disease or disability, died while on active service in the military is also eligible for the exemption.
Yes. Exemptions up to $111,296 are available to a qualified veteran or surviving spouse regardless of income. Exemptions over $111,296 depend on the income of the veteran or surviving spouse.
Disabled Veterans’ Exemptions up to $111,296 of assessed value depend on the assessed value of the property, percentage of ownership, and timeliness of filing a claim for the exemption.
To qualify for an exemption over $111,296, an applicant must have an annual household income (from all sources, both taxable and non-taxable) of no more than $49,979, as adjusted for annual inflation. Exemptions over $111,296 require an annual filing. For more information on the income level for exemptions over $111,296, please call the Disabled Veterans’ Exemption Section of the Assessor’s Office at (951) 413-2800.
In order to qualify, you must submit the following information:
“¢ A Disabled Veterans’ Exemption claim, (BOE 261G) available at the Assessor’s Office, by calling (951)
413-2800, or on the Assessor’s web site at www.riversideacr.com.
“¢ A copy of the veteran’s honorable discharge from the military (DD214).
“¢ A letter from the Veterans Administration attesting to 100% disability.
What is necessary for the surviving spouse to file for the exemption?
In addition to the items listed above, the surviving spouse must submit the following information:
“¢ A copy of the marriage certificate.
“¢ A copy of the death certificate.
A qualified applicant must file by the end of the calendar year for the tax year in which they wish to seek relief. For example, an applicant acquiring property in March 2007 must file an exemption claim by December 31, 2007 in order to be considered timely. Claims received after that date are still eligible for exemption, but will only receive 85% of the appropriate exemption for that year. Applicants will then receive 100% of the appropriate exemption every year thereafter.
