Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

CHAPTER 1. Taxation Base

Article 1. Taxable and Exempt Property

Section 218

218. Homeowners' exemption. (a) The homeowners' property tax exemption is in the amount of the assessed value of the dwelling specified in this section, as authorized by subdivision (k) of Section 3 of Article XIII of the California Constitution. That exemption shall be in the amount of seven thousand dollars ($7,000) of the full value of the dwelling.

(b) (1) The exemption does not extend to property that is rented, vacant, under construction on the lien date, or that is a vacation or secondary home of the owner or owners, nor does it apply to property on which an owner receives the veteran's exemption.

(2) Notwithstanding paragraph (1), if a person receiving the exemption is not occupying the dwelling on the lien date because the dwelling was damaged in a misfortune or calamity, the person shall be deemed to occupy that same dwelling as his or her principal place of residence on the lien date, provided the person's absence from the dwelling is temporary and the person intends to return to the dwelling when possible to do so. Except as provided in paragraph (3), when a dwelling has been totally destroyed, and thus no dwelling exists on the lien date, the exemption provided by this section shall not be applicable until the structure has been replaced and is occupied as a dwelling.

(3) A dwelling that was totally destroyed in a disaster for which the Governor proclaimed a state of emergency, that qualified for the exemption provided by this section prior to the commencement date of the disaster and that has not changed ownership since the commencement date of the disaster, shall be deemed occupied by the person receiving the exemption on the lien date provided the person intends to reconstruct a dwelling on the property and occupy the dwelling as his or her principal place of residence when it is possible to do so.

(c) For purposes of this section, all of the following apply:

(1) "Owner" includes a person purchasing the dwelling under a contract of sale or who holds shares or membership in a cooperative housing corporation, which holding is a requisite to the exclusive right of occupancy of a dwelling.

(2) (A) "Dwelling" means a building, structure, or other shelter constituting a place of abode, whether real property or personal property, and any land on which it may be situated. A two-dwelling unit shall be considered as two separate single-family dwellings.

(B) "Dwelling" includes the following:

(i) A single-family dwelling occupied by an owner thereof as his or her principal place of residence on the lien date.

(ii) A multiple-dwelling unit occupied by an owner thereof on the lien date as his or her principal place of residence.

(iii) A condominium occupied by an owner thereof as his or her principal place of residence on the lien date.

(iv) Premises occupied by the owner of shares or a membership interest in a cooperative housing corporation, as defined in subdivision (i) of Section 61, as his or her principal place of residence on the lien date. Each exemption allowed pursuant to this subdivision shall be deducted from the total assessed valuation of the cooperative housing corporation. The exemption shall be taken into account in apportioning property taxes among owners of share or membership interests in the cooperative housing corporations so as to benefit those owners who qualify for the exemption.

(d) The exemption provided for in subdivision (k) of Section 3 of Article XIII of the California Constitution shall first be applied to the building, structure, or other shelter and the excess, if any, shall be applied to any land on which it may be located.

History.—Added by Stats. 1968, p. 8 (First Extra Session), in effect September 23, 1968, operative March 1, 1969. Stats. 1970, p. 1030, in effect November 23, 1970, added the second sentence to the second paragraph. Stats. 1971, p. 3781, in effect March 4, 1972, operative for property taxes for the 1972–73 fiscal year and fiscal years thereafter added "or who holds shares or membership in a cooperative housing corporation, which holding is a requisite to the exclusive right of occupancy of a dwelling" after "sale" in the third sentence of the first paragraph and added subsection (d). Stats. 1972, p. 1, in effect January 18, 1972, substituted "homeowners' " for "homeowner's" in the first sentence. Section 218 as amended by Stats. 1971, Ch. 1752, was repealed by Stats. 1972, p. 2958, in effect December 26, 1972, operative on the lien date in 1973. Section 218 was reenacted by the same Stats. 1972, p. 1958, with the same effective and operative dates which increased the amount of the exemption from $750 to $1,750 and made the exemption applicable to a multiple dwelling unit occupied by the owner of more than two units. Stats. 1973, Ch. 842, p. 1506, in effect January 1, 1974, inserted "paragraphs (1) and (2) of subdivision (a) of" before "section 17265" in subsection (d). Stats. 1974, Ch. 311, p. 597, in effect January 1, 1975, substituted "subdivision (k) of Section 3" for "Section 1d" in the first sentence of the first paragraph and in the first sentence of the sixth paragraph. Stats. 1976, Ch. 1060, p. 4691, in effect September 21, 1976, deleted "or to property for which an owner received an allowance for taxes, either in whole or in part, either directly or indirectly, for the property tax year from the state or any political subdivision thereof, except assistance received under Part 10.5 (commencing with Section 19501) of Division 2 of this code" after "veteran's exemption" in the first sentence of the fourth paragraph, and added the seventh paragraph. Stats. 1978, Ch. 1207, in effect January 1, 1979, operative January 1, 1981, added the second sentence to the first paragraph and deleted the second and third paragraphs. Stats. 1986, Ch. 608, effective date January 1, 1987, inserted "or her" after "his" in subsections (a) and (b), substituted "subdivision (h) of Section 61, as his or her" for "paragraphs (1) and (2) of subdivision (a) of Section 17265, as his" after "defined in" in the first sentence of subsection (d), and deleted the former fifth paragraph regarding pending litigation affecting this section. Stats. 1992, Ch. 1180, in effect January 1, 1993, substituted "that" for "such" before "exemption" in the second sentence of the first paragraph, added "or her" after "his" in subdivision (c); and added the fourth paragraph. Stats. 2003, Ch. 471 (SB 1062), in effect January 1, 2004, designated the former first paragraph as subdivision (a); designated the former first sentence of the second paragraph as subdivision (b) and substituted "that" for "which" twice therein; created subdivision (c) by adding the phrase "For purposes of this section, all of the following apply:", and designated the former second sentences of the second paragraph as paragraph (1) thereof, designated the former first and second sentence of the former third paragraph as paragraph (2) thereof, deleted "For purposes of this section" before "A two-dwelling" therein, deleted the former third sentence of the second paragraph that provided "As used in this section 'dwelling' shall include:", added subparagraph (B), designated former subsections (a), (b), (c), and (d) of the former second paragraph as clauses (i), (ii), (iii) and (iv), respectively, and substituted "subdivision (i)" for "subdivision (h)" after "as defined in" in the first sentence of clause; and designated the former fourth and fifth paragraphs as subdivisions (d) and (e), respectively. Stats. 2004, Ch. 792 (SB 1147), in effect September 25, 2004, relettered former subdivision (e) as new subdivision (g) and added new subdivisions (e) and (f). Stats. 2005, Ch. 624 (AB 18), in effect October 6, 2005, relettered former subdivision (g) as subdivision (i) and added new subdivisions (g) and (h). Stats. 2006, Ch. 897 (AB 2735), in effect September 30, 2006, relettered former subdivision (i) as subdivision (k) and added new subdivisions (i) and (j). Stats. 2007, Ch. 224 (AB 62), in effect September 21, 2007, relettered former subdivision (k) as subdivision (o) and added subdivisions (k), (l), (m) and (n). Stats. 2008, Ch. 386 (SB 1064), in effect September 27, 2008, relettered former subdivision (o) as subdivision (v) and added subdivisions (o), (p), (q), (r), (s), (t) and (u). Stats. 2009, Ch. 299 (AB 1568), in effect January 1, 2010, added "California" after "Article XIII of the" in the first sentence of subdivision (a); relettered former subdivision (v) as subdivision (z) and added "California" after "Article XIII of the" in the first sentence therein; and added subdivisions (v), (w), (x), and (y). Stats. 2010, Ch. 654 (SB 1494), in effect January 1, 2011, designated the first paragraph of subdivision (b) as paragraph (1) thereof and added paragraphs (2) and (3) thereto; deleted former subdivisions (d) through (y) which related to dwellings damaged or destroyed by specific disasters occurring in prior years; and relettered former subdivision (z) as subdivision (d).

Note.—Section 6 of Stats. 2009, Ch. 299 (AB 1568), in effect January 1, 2010, provided that it is the intent of the Legislature to provide in the annual Budget Act those additional reimbursements to local governments that, as a result of Section 1 of this act, are required by Section 25 of Article XIII of the California Constitution.

Section 7 thereof provided that the Legislature finds and declares that this act fulfills a statewide public purpose because of all of the following:

(a) The Governor of California has officially proclaimed a state of emergency declaring that the wildfires that occurred within the Counties of Los Angeles and Ventura, commencing in October 2008 or November 2008, constitute conditions of extreme peril to public health and safety to persons and property within those counties, thus qualifying affected persons for various forms of governmental assistance and relief.

(b) The Governor of California has officially proclaimed a state of emergency declaring that the wildfires that occurred within the Counties of Orange, Riverside, and San Bernardino, commencing in November 2008, constitute conditions of extreme peril to public health and safety to persons and property within those counties, thus qualifying affected persons for various forms of governmental assistance and relief.

(c) The Governor of California has officially proclaimed a state of emergency declaring that the wildfires that occurred within the County of Santa Barbara, commencing in November 2008 or May 2009, constitute conditions of extreme peril to public health and safety to persons and property within that county, thus qualifying affected persons for various forms of governmental assistance and relief.

(d) This act is consistent with, and supplements, the proclaimed disaster assistance and relief by providing necessary fiscal assistance and tax relief to affected jurisdictions and persons to allow them to maintain essential basic services and repair damage to, and restore, their homes and businesses.

Construction.—Owners of leasehold condominiums are entitled to this exemption because the interests satisfied the statutory definitional requirements of a condominium, and since a condominium may be a leasehold or subleasehold in duration, each owner owned a condominium within the meaning of this section. In the context of assessments, the term "owner" is used for both fee and nonfee condominiums, and nonfee condominiums include leasehold and subleasehold condominiums. Smith v. State Board of Equalization, 53 Cal.App.4th 331. Under Revenue and Taxation Code Sections 218 and 69.5, in order to transfer the base year value of an original property to a replacement property, the original property must be the principal residence of a person over the age of 55 years who was the owner of record at the time of the sale of original property. When an individual transferred the original property to his wholly owned corporation before it was sold, he did not qualify for either the homeowner's exemption or a base year value transfer. The individual had to accept the tax consequences of this choice to transfer to a corporation whether or not such consequences were contemplated. Grotenhuis v. County of Santa Barbara (2010) 182 Cal.App.4th 1158.