Introduction
Owning property in California can be expensive, but property tax exemptions may lower your tax bill significantly. Whether you’re a homeowner, senior citizen, veteran, or nonprofit, the state offers several ways to reduce your property taxes—legally and efficiently.
Understanding California Property Taxes
Applicable Code: California Revenue & Taxation Code §§ 50–100.
- Property tax is generally 1% of the assessed value plus local levies.
- Assessed value is based on the purchase price, capped by Proposition 13, unless there’s a reassessment trigger (e.g., new ownership, improvements).
Who Can Qualify for Property Tax Exemptions?
- Homeowners (Owner-Occupied Residence)
- Seniors (Age 55+)
- Disabled Veterans
- Nonprofit Organizations
- Low-Income Households (in select counties)
Key Property Tax Exemptions in California
| Exemption | Benefit | Who Qualifies? |
|---|---|---|
| Homeowners’ Exemption | $7,000 reduction in assessed value (≈ $70/year savings) | Owner-occupied principal residence |
| Disabled Veterans’ Exemption | Up to $161,083 or more (fully exempt if severely disabled) | 100% service-connected disability |
| Senior Transfer of Base Year Value (Prop 19) | Avoid reassessment when downsizing homes | Age 55+ moving within California |
| Nonprofit Exemption | Full exemption for qualified use | 501(c)(3) organizations |
| Low-Income Housing Exclusion | Varies by locality | Low-income qualifying units |
Example Scenarios
Example 1 – Homeowners’ Exemption
A couple buys a home for $500,000 in 2024. Applying for the exemption lowers the taxable value to $493,000, saving them $70–$100/year, depending on local taxes.
Example 2 – Disabled Veteran Exemption
A veteran with 100% disability purchases a $400,000 home. If eligible for the full exemption, they pay $0 in property taxes.
Example 3 – Senior Transfer (Prop 19)
A 60-year-old homeowner sells their $1M home and buys a $750,000 home in another county. Using Prop 19, they transfer their original assessed value, avoiding a new higher tax base.
Step-by-Step Guide to Applying
Step 1: Identify Your Eligibility
Check if you meet age, residency, disability, or ownership criteria.
Step 2: Complete the Required Form
- Form BOE-266 – Homeowners’ Exemption
- Form BOE-261-G – Disabled Veterans’ Exemption
- Form BOE-19-B – Base Year Value Transfer (Prop 19)
- Form BOE-267 – Welfare Exemption (Nonprofits)
Step 3: Submit to the County Assessor
Send the completed form to the county where the property is located.
Step 4: Check for Confirmation
Expect a notice of exemption approval or follow-up within 30–60 days.
Annual Renewal and Compliance
- Homeowners’ Exemption renews automatically if the property remains your principal residence.
- Veterans and nonprofits must recertify annually.
- Notify the Assessor if your eligibility status changes (e.g., you rent out the property).
- Conclusion
California offers multiple property tax exemptions that can save you hundreds or even thousands of dollars each year. Whether you’re a homeowner, senior, or veteran, applying for the correct exemption is a smart move to lower your annual property tax bill.
Call to Action
Need help claiming a property tax exemption or transferring your assessed value under Prop 19?
Schedule a consultation with Anshul Goyal, CPA EA FCA, a U.S.-licensed Certified Public Accountant and IRS Enrolled Agent who specializes in California tax compliance and cross-border planning.
📅 Book your appointment here
FAQs – Common Property Tax Exemption Questions
Q1: Do I have to reapply for the Homeowners’ Exemption every year?
No, it’s automatic unless your residency status changes.
Q2: What’s the deadline to file exemption forms?
February 15 is the typical deadline for most exemptions, though late filings may receive partial benefits.
Q3: Can I get both the Homeowners’ and Veterans’ Exemption?
No, you must choose one—but the Veterans’ Exemption usually provides a greater benefit.
Q4: How does Proposition 19 work for seniors?
It allows seniors to transfer their property tax base up to three times when moving to a new home in California.
Q5: Are rental properties eligible for these exemptions?
Generally no. Most exemptions require the property to be owner-occupied or used for qualified nonprofit purposes.
About Our CPA
Anshul Goyal, CPA EA FCA is a U.S.-licensed Certified Public Accountant, Enrolled Agent, and Fellow Chartered Accountant. With over 15 years of experience, Anshul has assisted thousands of clients in California and nationwide with property tax planning, IRS representation, and compliance with California state tax law.
Disclaimer
This blog is intended for informational purposes only and does not constitute legal or tax advice. Property tax laws and exemptions may change, and eligibility depends on specific facts. Please consult a qualified CPA or legal advisor before acting on any tax information.