Existing property tax law, pursuant to constitutional authorization, provides for a "welfare exemption" for property used exclusively for religious, hospital, scientific, or charitable purposes and that is owned or operated by certain types of nonprofit entities, if certain qualifying criteria are met. That law provides a partial welfare exemption in the case of residential rental property used for lower income households, as specified, calculated as that percentage of the value of the property that is equal to the percentage that the number of units serving lower income households represents of the total number of residential units. This bill would provide a partial welfare exemption in the case of certain residential rental property used for low- and moderate-income households. The partial exemption would be equal to that percentage of the value of the property that is equal to the percentage that the number of units serving low- and moderate-income households, as defined, represents of the total number of residential units, as provided. The bill would require an owner to make specified certifications, under penalty of perjury, relating to the use of the property. By expanding the duties of local tax officials, and by expanding the crime of perjury, this bill would impose a state-mandated local program. The bill would declare that its provisions are severable. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.
The California Constitution provides that all property is taxable, and requires that it be assessed at the same percentage of fair market value, unless otherwise provided by the California Constitution or federal law. The California Constitution and existing property tax law provide various exemptions from taxation, including, among others, a disabled veterans' exemption. Under existing law, the disabled veterans' exemption exempts from taxation part of the full value of property that constitutes the principal place of residence of a veteran, the veteran's spouse, or the veteran and veteran's spouse jointly, and the unmarried surviving spouse of a veteran, as provided, if the veteran incurred specified injuries or died while on active duty in military service, as described. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000 if the household income of the claimant does not exceed $40,000, as adjusted for inflation, as specified. This bill would, until January 1, 2036, exclude service-connected disability payments from the definition of "household income" for purposes of the disabled veterans' exemption. The bill would also correct an erroneous cross-reference in the above-described provisions. By imposing additional duties on local tax officials, the bill would impose a state-mandated local program. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.
The California Constitution limits the amount of ad valorem taxes on real property to 1% of the full cash value of that property, defined as the county assessor's valuation of real property as shown on the 1975–76 tax bill and, thereafter, the appraised value of the real property when purchased, newly constructed, or a change in ownership occurs after the 1975 assessment, subject to an annual inflation adjustment not to exceed 2%. Pursuant to constitutional authorization, existing property tax law, on and after February 16, 2021, excludes from classification as a change in ownership the purchase or transfer of a family home or family farm, as those terms are defined, of the transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased, if the property continues as the family home or family farm of the transferee, as specified. For purposes of the transfer of a family home, that law requires the transfer to be of a principal residence of the transferor and to become the principal residence of the transferee within one year of the transfer. That law also requires the transferee to file for the homeowners' or disabled veterans' exemption within a year of the transfer, as described. This bill would expand the above-described exclusion to include, in the case of the purchase or transfer of a family home or a family farm, as applicable, a purchase or transfer of that family home or family farm between eligible transferees, as specified. The bill would also specify that, in the event of a transfer by certain judicial decrees, the transfer commencing either of the above-described one-year periods shall be deemed to occur as of the effective date of the final judicial decree, as specified. The bill would require a transferee to notify the assessor of the county in which the property is located of their intention to claim the exclusion, as specified. By expanding the duties of local tax officials, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.
(1) The California Constitution generally limits the maximum rate of ad valorem tax on real property to 1% of the full cash value of the property and defines "full cash value" for these purposes as the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. Pursuant to constitutional authorization, existing property tax law excludes from the definition of "newly constructed" for these purposes the construction or addition of any active solar energy system, as defined, through the 2025–26 fiscal year, as provided. Existing law provides the exclusion for an active solar energy system applies to the initial purchaser of a new building, as provided, and requires the initial purchaser to file a claim with the assessor. This bill would state a claim filed by an initial purchaser is timely if it is filed within three years of the date of purchase. The bill would also provide that an otherwise valid claim for exclusion filed after the three year deadline would be applied beginning on the lien date for the assessment year in which the claim is filed. The bill would make these provisions operative beginning January 1, 2027. (2) Existing law, with respect to supplemental property tax assessments, specifies various limitation periods for assessments on the supplemental tax roll. Existing law provides for the application of property tax exemptions to those supplemental assessments provided, among other things, that an assessee file an exemption application within a specified time. Existing property tax law allows taxes, penalties, and interest imposed for late filings of property tax exemption applications for the supplemental roll that exceed $250 in total to be canceled or refunded up to 85% or 90%, as applicable, in the case of the exemption for a college, cemetery, church, religious, exhibition, or veterans' organization. This bill would expand this reduction to be applied to exemptions for public schools, as provided. (3) Existing property tax law provides, with respect to property eligible for the college, cemetery, church, religious, exhibition, veterans' organization, free public libraries, free museums, public schools, community colleges, state colleges, state universities, tribal housing, or welfare exemption but for which a timely application for exemption was not filed, that 90% of any tax or penalty or interest on that property shall be canceled or refunded if an appropriate application for exemption is filed on or before the lien date in the calendar year next succeeding the calendar year in which the exemption was not claimed by a timely application. Existing property tax law requires, if an appropriate application for exemption is filed within 90 days from the first day of the month following the month in which the property was acquired or by February 15 of the following calendar year, whichever occurs first, any tax or penalty or interest imposed upon property owned by any organization qualified for the college, cemetery, church, religious, exhibition, veterans' organization, tribal housing, or welfare exemption that is acquired by that organization during a given calendar year, after the lien date but before the first day of the fiscal year commencing within that calendar year, if the property is of a kind that would have been qualified for the college, cemetery, church, religious, exhibition, veterans' organization, tribal housing, or welfare exemption if it had been owned by the organization on the lien date, to be canceled or refunded. This bill would add public schools to the list of entities eligible for the cancellation or refund of any tax or penalty or interest imposed on property acquired in a given calendar year after the lien date but before the first day of the fiscal year commencing within that calendar year. The bill also would make conforming changes. By expanding the duties of local tax officials, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1) The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, "full cash value" is defined as the assessor's valuation of real property as shown on the 1975–76 tax bill under "full cash value" or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines "newly constructed" and "new construction" to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of "newly constructed" and "new construction" any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided. Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided. This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire on or after January 7, 2025, but before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 2025–26 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program. (2) Existing property tax law authorizes counties to adopt ordinances that allow assessees whose property was damaged or destroyed to apply for a reassessment of that property if certain conditions, including the filing of an application for reassessment, are met. This bill would require that, in the case of property impacted by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire, the fair market value of that real property on January 1, 2025, takes into account any reduction in value to that property due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value. (3) This bill would make legislative findings and declarations as to the public purpose served by these provisions. (4) This bill would incorporate additional changes to Section 70.5 of the Revenue and Taxation Code proposed by SB 663 to be operative only if this bill and SB 663 are enacted and this bill is enacted last. (5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. (6) Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. (7) This bill would declare that it is to take effect immediately as an urgency statute.
Existing law requires the county assessor to consider, when valuing real property for property taxation purposes, the effect of any enforceable restrictions to which the use of the land may be subjected, including, but not limited to, zoning, recorded contracts with governmental agencies, and various other restrictions imposed by governments. This bill would add to the above-described enforceable restrictions certain renewable leases between a commercial community ownership entity, as defined, that owns the land and a nonprofit, as defined. By expanding the duties of local tax officials, this bill would impose a state-mandated local program. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.
