Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2011
 

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

CHAPTER 1. Taxation Base

Article 1. Taxable and Exempt Property

Section 205.5

205.5. Disabled veterans' residences. [Repealed by Stats. 2000, Ch. 1086 (SB 2195) in effect September 30, 2000.]

205.5. Disabled veterans' residences. (a) Property that constitutes the principal place of residence of a veteran, that is owned by the veteran, the veteran's spouse, or the veteran and the veteran's spouse jointly, is exempted from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), as adjusted for the relevant assessment year as provided in subdivision (h), if the veteran is blind in both eyes, has lost the use of two or more limbs, or if the veteran is totally disabled as a result of injury or disease incurred in military service. The one hundred thousand dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of an eligible veteran whose household income does not exceed the amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g).

(b) (1) For purposes of this section, "veteran" means either of the following:

(A) A veteran as specified in subdivision (o) of Section 3 of Article XIII of the California Constitution without regard to any limitation contained therein on the value of property owned by the veteran or the veteran's spouse.

(B) Any person who would qualify as a veteran pursuant to paragraph (1) except that he or she has, as a result of a service-connected injury or disease, died while on active duty in military service. The United States Department of Veterans Affairs shall determine whether an injury or disease is service connected.

(2) For purposes of this section, property is deemed to be the principal place of residence of a veteran, disabled as described in subdivision (a), who is confined to a hospital or other care facility, if that property would be that veteran's principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. A family member that resides at the residence is not considered to be a third party.

(c) (1) Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a deceased veteran is exempt from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), in the case of a veteran who was blind in both eyes, had lost the use of two or more limbs, or was totally disabled provided that either of the following conditions is met:

(A) The deceased veteran during his or her lifetime qualified in all respects for the exemption or would have qualified for the exemption under the laws effective on January 1, 1977, except that the veteran died prior to January 1, 1977.

(B) The veteran died from a disease that was service connected as determined by the United States Department of Veterans Affairs. The one hundred thousand dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of an eligible unmarried surviving spouse whose household income does not exceed the amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g).

(2) Commencing with the 1994–95 fiscal year, property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran as described in paragraph (2) of subdivision (b) is exempt from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), as adjusted for the relevant assessment year as provided in subdivision (h). The one hundred thousand dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of an eligible unmarried surviving spouse whose household income does not exceed the amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g).

(d) As used in this section, "property that is owned by a veteran" or "property that is owned by the veteran's unmarried surviving spouse" includes all of the following:

(1) Property owned by the veteran with the veteran's spouse as a joint tenancy, tenancy in common, or as community property.

(2) Property owned by the veteran or the veteran's spouse as separate property.

(3) Property owned with one or more other persons to the extent of the interest owned by the veteran, the veteran's spouse, or both the veteran and the veteran's spouse.

(4) Property owned by the veteran's unmarried surviving spouse with one or more other persons to the extent of the interest owned by the veteran's unmarried surviving spouse.

(5) So much of the property of a corporation as constitutes the principal place of residence of a veteran or a veteran's unmarried surviving spouse when the veteran, or the veteran's spouse, or the veteran's unmarried surviving spouse is a shareholder of the corporation and the rights of shareholding entitle one to the possession of property, legal title to which is owned by the corporation. The exemption provided by this paragraph shall be shown on the local roll and shall reduce the full value of the corporate property. Notwithstanding any provision of law or articles of incorporation or bylaws of a corporation described in this paragraph, any reduction of property taxes paid by the corporation shall reflect an equal reduction in any charges by the corporation to the person who, by reason of qualifying for the exemption, made possible the reduction for the corporation.

(e) For purposes of this section, being blind in both eyes means having a visual acuity of 5/200 or less, or concentric contraction of the visual field to 5 degrees or less; losing the use of a limb means that the limb has been amputated or its use has been lost by reason of ankylosis, progressive muscular dystrophies, or paralysis; and being totally disabled means that the United States Department of Veterans Affairs or the military service from which the veteran was discharged has rated the disability at 100 percent or has rated the disability compensation at 100 percent by reason of being unable to secure or follow a substantially gainful occupation.

(f) An exemption granted to a claimant in accordance with the provisions of this section shall be in lieu of the veteran's exemption provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article XIII of the California Constitution and any other real property tax exemption to which the claimant may be entitled. No other real property tax exemption may be granted to any other person with respect to the same residence for which an exemption has been granted under the provisions of this section; provided, that if two or more veterans qualified pursuant to this section coown a property in which they reside, each is entitled to the exemption to the extent of his or her interest.

(g) Commencing on January 1, 2002, and for each assessment year thereafter, the household income limit shall be compounded annually by an inflation factor that is the annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.

(h) Commencing on January 1, 2006, and for each assessment year thereafter, the exemption amounts set forth in subdivisions (a) and (c) shall be compounded annually by an inflation factor that is the annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.

History.—Added by Stats. 1974, Ch. 311, p. 592, in effect January 1, 1975. Stats. 1975, Ch. 662, p. 1449, in effect September 10, 1975, added "or has rated the disability compensation at 100 percent by reason of being unable to secure or follow a substantially gainful occupation" after "disability at 100 percent" in subdivision (b). Stats. 1976, Ch. 47, p. 77, in effect March 17, 1976, deleted "(q)," after "(p)," in subdivision (a); and added "or the military service from which such veteran was discharged" after "Administration", and substituted "substantially" for "substantial" in subdivision (b). Stats. 1976, Ch. 681, p. 1677, in effect January 1, 1977, relettered the former subdivisions (b), (d), and (e) as subdivisions (f), (e), and (g), respectively; revised subdivisions (a), (c), (e), and (g); added the balance of subdivision (c) after "disabled"; added the balance of the second sentence of subdivision (g) after "of this section"; and added subdivisions (b) and (d). Stats. 1977, Ch. 961, in effect January 1, 1978, substituted "exempted" for "exempt" in subdivision (a), substituted "(o)" for "(a)" in subdivision (b), and substituted "or would have qualified for the exemption under the laws effective on January 1, 1977, except that the veteran died prior to January 1, 1977." for "under the laws in effect during his or her lifetime." in subdivision (d). Deleted "subsection" in the second and third sentence of paragraph (5) of subdivision (e) and replaced it by "paragraph". Deleted "(q)," after "(p)" and corrected "coown" to "co-own" in subdivision (g). Stats. 1978, Ch. 1276, in effect January 1, 1979 added the clause regarding disability caused through disease; added the last sentence of subdivision (a) and the provision following the January 1, 1977, date in subdivision (d). Stats. 1978, Ch. 1207, in effect January 1, 1979, operative January 1, 1981, substituted "full" for "assessed" before "value" and "forty thousand dollars ($40,000)" for "ten thousand dollars ($10,000)" and "sixty thousand dollars ($60,000)" for "fifteen thousand dollars ($15,000)" in both subdivision (a) and subdivision (d), and substituted "specified" for "defined" before "in Section 20504" in subdivision (d). Stats. 1984, Ch. 1332, in effect January 1, 1985, deleted ", or is totally disabled" after "limbs" and added "or that does not exceed one hundred thousand dollars . . . military service" after "service" in the first sentence and added "forty thousand dollars ($40,000) before "exemption", and substituted "an eligible" for "such a" before "veteran" in the second sentence of subdivision (a); added "in the case of a veteran . . . totally disabled" after "($40,000)" and added "forty thousand dollars ($40,000)" before "exemption" and substituted "an eligible" for "such an" after "of" in the second sentence of subdivision (d); added "all of the following" after "includes" in subdivision (e) and substituted "the" for "such" in subsection (5) thereof; and added subdivision (h). Stats. 1986, Ch. 608, effective January 1, 1987, added "(q)," after "(p)," in the first sentence of subdivision (g). Stats. 1988, Ch. 411, in effect January 1, 1989, deleted former subdivision (c) and relettered the former subdivisions (d), (e), (f), (g), and (h) as (c), (d), (e), (f) and (g) respectively. Stats. 1989, Ch. 1077, in effect January 1, 1990, added ", and the one hundred thousand . . . ($150,000)," after "($60,000)" in the second sentences of subdivisions (a) and (c). Stats. 1993, Ch. 140, in effect January 1, 1994, substituted "that" for "which" after "Property" and after "by, and" in the first sentence of subdivisions (a) and (c); added "means . . . following:" after "veteran", deleted "is defined as specified in subdivision (o) of Section 3 of Article XIII of the Constitution without regard to any limitation contained therein on the value of property owned by the veteran or the veteran's spouse.", and added paragraphs (1) and (2) to subdivision (b); established former subdivision (c) as paragraph (1) of subdivision (c), and added paragraph (2) to subdivision (c); substituted "that" for "which" after "property" in the first sentence of subdivision (d); and substituted "the" for "such" after "from which" in subdivision (e). Stats. 1995, Ch. 536, in effect October 4, 1995, substituted "2001" for "1996" after "until January 1," and substituted "that" for "which" after "enacted statute" in subdivision (g). Stats. 1996, Ch. 1087, in effect January 1, 1997, substituted "United States Department of Veterans Affairs" for "Veterans Administration" in paragraph (2) of subdivision (b), in subparagraph (B) of paragraph (1) of subdivision (c), and in subdivision (e); substituted "totally disabled provided that either of the following conditions is met:" for "totally disabled; provided that the" after "veteran who was", substituted "1977." for "1977; or provided that the" after "January 1,", and created subparagraphs (A) and (B) of paragraph (1) of subdivision (c), with the former text of paragraph (1) following "veteran who was"; substituted "that" for "which" in subparagraph (B) of paragraph (1) of subdivision (c). Stats. 2000, Ch. 1086 (SB 2195), in effect September 30, 2000, deleted "forty thousand dollars ($40,000), if the veteran is blind in both eyes or has lost the use of two or more limbs as a result of injury or disease incurred in military service or that does not exceed" after "not exceed", added "blind in both eyes, has lost the use of two or more limbs, or if the veteran is" after "the veteran is" in the first sentence, deleted "forty thousand dollar ($40,000) exemption shall be sixty thousand dollars ($60,000), and the" and substituted "one-hundred-thousand-dollar" for "one hundred thousand dollar" after "The", deleted "as defined in Section 20504" after "household income", and substituted "amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g)" for "amounts specified in Section 20585" after "exceed the" in the second sentence of subdivision (a); deleted "forty thousand dollars ($40,000), in the case of a veteran who was blind in both eyes or had lost the use of two or more limbs, or" after "does not exceed" and added "was blind in both eyes, had lost the use of two or more limbs, or" after "veteran who" in the first sentence of the first paragraph, and deleted "forty thousand dollars ($40,000) exemption shall be sixty thousand dollars ($60,000), and the" after "the", substituted "one-hundred-thousand-dollar" for "one hundred thousand dollar" before "($100,000)", deleted "as specified in Section 20504" after "household income", and substituted "amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g)" for "amounts specified in Section 20585" after "not exceed the" in the first sentence of the second paragraph of subdivision (c)(1); substituted "one-hundred-thousand-dollar" for "one hundred thousand dollar" after "The", deleted "as specified in Section 20504" after "household income", and substituted "amount of forty thousand dollars ($40,000), as adjusted for relevant assessment year as provided in subdivision (g)" for "amounts specified in Section 20585" after "exceed the" in the second sentence of subdivision (c)(2); and added ", or concentric contraction of the visual field to 5 degrees or less" after "or less" in the first sentence of subdivision (e); and substituted subdivision (g) for former subdivision (g), which provided that the section would be repealed absent the enactment of a later statute. Stats. 2001, Ch. 407 (SB 1181), in effect January 1, 2002, substituted "Commencing on January 1, 2002, and for each assessment year thereafter, the household income limit shall be compounded annually" for "To determine, for taxes that attach as a lien in 2002 and in each calendar year thereafter, whether the lower or higher exemption amount governs the amount of an exemption under this section, each household income amount applied under subdivision (a) or (c) for taxes that attached as a lien during the immediately preceding calendar year shall be adjusted" before "by an" and substituted "annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent," for "percentage change, rounded to the nearest one-thousandth of 1 percent, from October of the prior fiscal year to October of the current fiscal year," after "factor that is the" in the first sentence of subdivision (g). Stats. 2003, Ch. 278 (AB 322), in effect September 4, 2003, deleted "is owned by, and that" after "Property that", deleted a comma after "of residence of", and added ", that is owned by the veteran, the veteran's spouse, or the veteran and the veteran's spouse jointly," after "of a veteran" in the first sentence of subdivision (a); designated the first sentence of subdivision (b) as new paragraph (1), renumbered former paragraphs (1) and (2) as subparagraphs (A) and (B), added "deceased" after "spouse of a" in the first sentence of paragraph (1) in subdivision (c); and added paragraph (2) in subdivision (b); and substituted "California Constitution" for "Constitution" throughout the text. Stats. 2004, Ch. 544 (SB 764), in effect September 16, 2004, added "as adjusted for the relevant assessment year as provided in subdivision (h)," after "($100,000)," in the first sentence, substituted "one hundred thousand dollar" for "one-hundred-thousand-dollar" after "The" and added "as adjusted for the relevant assessment year as provided in subdivision (h)," after "($150,000)," in the second sentence of subdivision (a); added "as adjusted for the relevant assessment year as provided in subdivision (h)," after "($100,000)," in the first sentence of paragraph (1), substituted "one hundred thousand dollar" for "one-hundred-thousand-dollar" after "The" and added "as adjusted for the relevant assessment year as provided in subdivision (h)," after "($150,000)," in the second sentence of subparagraph (B) thereof, added ", as adjusted for the relevant assessment year as provided in subdivision (h)" after "($100,000)" in the first sentence and substituted "one hundred thousand dollar" for "one-hundred-thousand-dollar" after "The", and added "as adjusted for the relevant assessment year as provided in subdivision (h)," after "($150,000)," in the second sentence of paragraph (2) of subdivision (c); and added subdivision (h).

Note.—Section 7 of Stats. 1975, Ch. 662, provided that no appropriation shall be made pursuant to Section 1 of this act because there are minor savings as well as minor costs in this act which, in the aggregate, do not result in significant identifiable cost changes. Section 3 of Stats. 1976, Ch. 681, p. 1679, provided no payment by state to local governments because of this act. Sec. 4 thereof provided that this act shall have prospective application only.

Note.—Section 3 of Stats. 1984, Ch. 1331, provided the Controller shall report to the Legislature on the amount of claims made by county auditors under Section 16113 of the Government Code for compensation for property tax revenues lost by reason of the classification or exemption of property by this act. The report shall be made on or before the first day of October next following the operative date of this act for claims made under subdivision (a) of Section 16113 and shall be made on or before the first day of December next following the operative date of this act for claims made under subdivision (b) of Section 16113. The report shall be made in order that the Legislature may appropriate funds for the subventions required by Section 2229 of the Revenue and Taxation Code. Section 4 provided no payment by state to local governments because of this act.

Note.—Section 4 of Stats. 1988, Ch. 411 provided that this act makes a classification or exemption of property for purposes of ad valorem property taxation within the meaning of Section 2229 of the Revenue and Taxation Code. Sec. 5 thereof provided that the amendments to the section made by this act are declaratory of existing law.

Note.—Section 1 of Stats. 2003, Ch. 278 (AB 322) provided that

(a) The Legislature of the State of California finds and declares the following:

(1) The California Constitution allows the Legislature to establish an exemption from property taxes for the home of a disabled veteran or the spouse of a disabled veteran, including the unmarried surviving spouse of a disabled veteran.

(2) A disabled veteran is defined by law as a veteran who, because of an injury incurred in military service is blind in both eyes, has lost the use of two or more limbs, is totally disabled, or who, as a result of service-connected injury, died while in active military service.

(3) The Revenue and Taxation Code authorizes a property tax exemption for property owned by a disabled veteran, if that property constitutes the principal place of residence of the disabled veteran.

(4) The Revenue and Taxation Code also authorizes a property tax exemption for property owned by an unmarried surviving spouse of a disabled veteran, if that property constitutes the principal place of residence of the unmarried surviving spouse.

(5) There are many disabled veterans who own property that qualifies for the disabled veterans' property tax exemption, but due to the fact that these disabled veterans are confined to hospitals or other medical institutions they are unable to occupy that property as their principal place of residence. In many cases the spouses of these disabled veterans continue to occupy the property as their principle place of residence.

(b) It is the intent of the Legislature in enacting this act to amend the Revenue and Taxation Code to conform with the California Constitution to further extend the disabled veterans' property tax exemption to property owned by the spouse of a living disabled veteran while that disabled veteran is confined to a hospital or other care facility and to extend the veterans' property tax exemption to an otherwise qualifying veteran who is unable to occupy that property as his or her principal place of residence because he or she is confined to a hospital or other care facility, provided that the property is not rented or leased to a third party.

Section 4 thereof provided that notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.

Section 5 thereof provided that this act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.

Note.—Section 2 of Stats. 2004, Ch. 544 (SB 764) provided that notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state may not reimburse any local agency for any property tax revenues lost by it pursuant to this act.

Section 3 thereof provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

Section 4 thereof provided that this act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.

Note.—Section 3 of Stats. 1989, Ch. 1078 provided that notwithstanding Section 2229 of the Revenue and Taxation Code, the requirements of that section relating to any exemption of property for more than five years or for more than 75 percent of the value thereof shall not apply to the exemption made by this act. Sec. 4 thereof provided that section 1 of this act shall be applicable to property taxes levied for the 1990–91 fiscal year through the 1995–96 fiscal year and that Section 2 thereof shall be applicable to property taxes levied for the 1996–97 fiscal year and fiscal years thereafter.

Note.—Section 3 of Stats. 2000, Ch. 1086 (SB 2195), provided that notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.

Note.—Section 12 of Stats. 2001, Ch. 407 (SB 1181) provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.