Details

Title	California Property Tax: An Overview
Highlights	There is implicit recognition that real estate taxes and property reassessments have a particularly severe impact on low-income homeowners.   California law contains a number of property tax exemptions and allows certain transactions to not require property reassessments.
Description	According to the State Board of Equalization’s publication "California Property Tax, An Overview", the California Constitution provides a number of property tax exemptions. Several of these exemptions are intended to reduce housing costs for low-income individuals. The Constitution provides for a $7,000 reduction in the taxable value for qualifying owner-occupied property. The state also allows county taxing authorities to exempt real property with a very low value if the taxes collected would be less than the cost of collection. Certain disabled veterans have an exemption of $100,000 on the value of their principal residence that can be increased to $150,000, if the disabled veteran meets certain income qualifications. Surviving spouses can also benefit from this provision. The state also provides that any modifications to existing housing for accessibility purposes can be excluded from reassessments. In addition, housing damaged or destroyed by a natural disaster can be given a lower value until reconstruction. Upon completion of construction, the unit will not be considered new construction if it is substantially equivalent to the structure prior to the damage or destruction. Since the enactment of Proposition 13 in 1978, annual increases in the assessed value of property are limited to two percent. Local tax offices can, however, reassess property that changes ownership or is new construction. The state enacted a number of exemptions that allow certain transfers and certain types of new construction to be undertaken without requiring a reassessment. Owners of property taken by eminent domain can transfer the value of the taken property to replacement property. Persons over 55 or those with certain disabilities have the right to transfer the taxable value of their principal residence to a replacement unit. People can undertake these transfers within a county or to another county that allows such transfers. The state also allows the purchase or transfer of a principal residence between parents, or sometimes grandparents, and children without being subject to reassessment. California provides to assistance low-income homeowners or renters who are senior citizens, blind, and/or disabled. The aid comes in the form of a reimbursement of a portion of local property taxes paid by an owner or implied taxes paid as part of a tenant’s rent. People who qualify must apply for this assistance. The State Controller’s Office administers a program that pays a portion of the applicable property taxes for qualified homeowners. This assistance must be repaid at some point and a lien is placed on the property to guarantee repayment.
Publication Date	2002
Organization	California State Board of Equalization
Web Location	http://www.boe.ca.gov/proptaxes/pdf/pub29.pdf

Notice: The contents of this record reflect the views of the author and/or promulgating municipality, and should not be construed as representing the views or policies of the U.S. Department of Housing and Urban Development or U.S. HUD's Office of Policy Development and Research. No attempt has been made by U.S. HUD or its contractors to verify the accuracy, currency, or validity of the record contents presented herein.