Disabled Veterans' Exemption
The Disabled Veterans’ Exemption reduces the property tax liability for qualified veterans who, due to a service-connected injury or disease, have been rated 100% disabled or are being compensated at the 100% rate due to unemployability. Along with the disability requirements, a qualified veteran is one that has been honorably discharged from one of the military services and served during one of the time periods listed in California Constitution Article XIII, section 3(o). See Veterans’ Exemption for a complete description of a qualified veteran. In order for property to qualify for the Disabled Veterans' Exemption, it must be used as the principal place of residence of the veteran or the unmarried surviving spouse of a qualified disabled veteran. One exception to this requirement occurs when the claimant is confined to a hospital or other care facility and the property would be that claimant's principal place of residence were it not for such confinement, provided that the residence is not rented or leased. The property may be owned by the veteran, the veteran's spouse, or the veteran and spouse jointly. The unmarried surviving spouse of qualified veterans may also claim the exemption.
This exemption provides for a more advantageous exemption than the Veterans' Exemption or the Homeowners' Exemption. Thus, if a veteran qualifies, a veteran who is a homeowner should choose the Disabled Veterans' Exemption in lieu of the Veterans' Exemption or the Homeowners' Exemption.
No other property tax exemption may be granted to a residence which has been granted a Disabled Veterans' Exemption. However, if two or more qualified veterans own a property in which they reside, each is entitled to the Disabled Veterans' Exemption to the extent of his or her interest.
A qualifying disabled veteran, or the unmarried surviving spouse of the veteran, may claim either of the following benefits on his or her principal place of residence:
- An exemption from property taxation on that part of the full value of the residence that does not exceed $100,000, as adjusted for the relevant assessment year (basic exemption); or
- An exemption from property taxation on that part of the full value of the residence that does not exceed $150,000, as adjusted for the relevant assessment year, when the household income of the veteran does not exceed $40,000, as adjusted for the relevant assessment year (low-income exemption).
The dollar amounts of the exemption and the income threshold for the low-income exemption are increased annually due to inflation.
- Section 205.5 subdivisions (g) and (h)
- Letter to Assessors 2015/021, Disabled Veterans' Exemption Increases for 2016
Definition of a Principal Place of Residence
For a property to be considered a principal place of residence for purposes of the Disabled Veterans' Exemption there is no statutory requirement that a veteran must reside in their primary residence for a particular amount of time to qualify for the exemption. In order to qualify for the Disabled Veterans' Exemption, the dwelling must be established as the owner's principal place of residence as of 12:01 a.m. on the lien date (January 1). If new to the property and not yet living at the property through a lien date, the exemption may be claimed by a qualified individual upon a change of ownership or completion of new construction on or after January 1.
One of the foremost factors in granting the Disabled Veterans' Exemption is determining what constitutes a dwelling as a principal place of residence. For property tax purposes, the relative definition of a principal place of residence is the same as, or closely parallels to, the legal doctrine of domicile. Under this doctrine, a person's domicile depends on two factors: physical presence and intention. The combination of both factors should be used to make the final determination of a claimant's primary residence.
Physical presence is the place where:
- A person is physically present and makes his or her home.
- A person customarily returns after work and between trips or absences due to work, pleasure, or otherwise, even if the absence is extended.
- Clothes and personal belongings are kept.
- Housekeeping (preparing meals, sleeping, bathing, entertaining) is set up.
- The person files income tax returns as a resident.
- A driver's licensed is issued.
- The person has listed for voter registration.
For the physical presence factor, the individual facts as they relate to each other as a whole should be reviewed in each claim, as not all elements listed are necessary to satisfy this requirement.
Intention factor is the intent of the claimant to remain at the residence and not the intent to stay there only for a temporary purpose and return to a legal domicile elsewhere. Of the two factors, intention is essential and required.
Definition of a Disabled Veteran
The Disabled Veterans' Exemption is available to a qualified veteran, who is disabled according to any one of the following criteria:
- Is blind in both eyes. 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.
- Has lost the use of two or more limbs. 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
- Was totally disabled as a result of injury or disease incurred in military service. Being totally disabled means that the United States Department of Veterans Affairs (USDVA) or the veteran's military branch 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. If a veteran has received a disability rating of 100 percent from the USDVA, the county assessor should consider the veteran qualified for the exemption without requiring further documentation of disability, such as medical files.
The principal place of residence of an unmarried surviving spouse of a deceased veteran may qualify for the Disabled Veterans' Exemption. The benefits are extended to the unmarried surviving spouse of a veteran who:
- Qualified for the exemption during his or her lifetime;
- Would have qualified if he or she had been alive on January 1, 1977; or
- Died from a service-connected injury or disease.
While the first two instances above require that the veteran had to qualify for the exemption (be rated as 100 percent totally disabled), the latter instance only requires that the veteran died of an injury or disease which was service-connected. Thus, in this instance, the unmarried surviving spouse may be eligible for exemption even though the veteran was not eligible during his or her lifetime.
If the unmarried surviving spouse receives documentation from the USDVA showing that the veteran died of a service-connected injury or disease, the county assessor should consider the unmarried surviving spouse qualified for the exemption without requiring further documentation.
Form BOE-261-G, Claim for Disabled Veterans' Property Tax Exemption, must be used when claiming this exemption on a property for the very first time for both the basic and the low-income Disabled Veterans' Exemption. The claim form is available by contacting your county assessor who may offer a downloadable form from their website.
In order to receive 100 percent of the basic exemption in the first year claimed, the claim form must be filed between the date the property or veteran qualifies and on or before the following January 1, or 90 days after the date of qualification, whichever is later. A one-time filing is only required for the $100,000 basic exemption; however, annual filing is required for the $150,000 low-income exemption to ensure the veteran continues to meet the household income limit restriction (claim form must be filed between January 1 and February 15).
The veteran must file the form with the county assessor of the county in which the property is located. All information requested on the form must be provided, including the following information:
- Name of the person claiming the exemption
- Address of the property
- Statement that the veteran owned and occupied the property as his or her principal place of residence on the lien date, or that he or she intends to own and occupy the property as a principal place of residence on the next succeeding lien date
- Proof of disability and honorable discharge
The following links may provide additional information or assistance regarding the Disabled Veterans' Exemption: