Frequently Asked Questions – Disabled Veterans’ Exemption and Veterans’ Exemption

1. Are there any property tax exemptions for veterans?
2. There is a big difference between the veterans' exemption and the disabled veterans' exemption. Can you explain each one?
3. Can a person receive the disabled veterans' exemption (or veterans' exemption) and the homeowners' exemption at the same time?
4. Is a veteran of the National Guard eligible for the veterans' or disabled veterans' exemption? The military services listed in Section 3(o) of the California Constitution only include the Army, Navy, Air Force, Marines, Coast Guard, or Revenue Marine (Revenue Cutter) Service.

DISABLED VETERANS’ EXEMPTION

5. On what basis is the disabled veterans' exemption annually adjusted?
6. For purposes of the disabled veterans' exemption, what is the definition of "totally disabled"?
7. I have just been granted the disabled veterans' exemption on my mobilehome, which is assessed at $58,000. Since I qualify for the basic $100,000 exemption, will the excess be applied to the special assessments or direct levies on my tax bill?

Qualifying Claimant

8. I have a friend who is receiving both a pension and the $4,000 veterans' exemption on his boat because his unmarried son died while serving in Iraq. My son, who lived with me until he left for the service, was also killed. Am I eligible for the disabled veterans' exemption on my home?
9. I am a veteran with an 80 percent disability rating. Would I be allowed 80 percent of the disabled veterans' exemption?
10. I am a disabled veteran living in a home in which legal title is in a corporate entity. As a shareholder of the corporation, I am entitled to occupy the home as my principal place of residence. Am I eligible for the disabled veterans' exemption on the home?
11. Will I still be entitled to the disabled veterans' exemption if my wife and I created a revocable trust where our children hold title to the property as trustees and we as the beneficiaries?
12. My husband contracted an infectious disease while in the service. He received a 30 percent disability rating from the USDVA, which did not provide eligibility for the disabled veterans' exemption. He recently died as a result of the disease. Am I now eligible for the exemption?
13. I have been receiving the disabled veterans' exemption as an unmarried surviving spouse for many years. Since I will be 58 next year, may I remarry and still receive the exemption?
14. My disabled veteran husband and I are currently renting a home. I just inherited a house which is in my name only. If we move into that house, can my husband receive the disabled veterans' exemption even though his name is not on the title?
15. Is my registered domestic partner regarded the same as my spouse for the disabled veterans' exemption? We purchased a home for $180,000, each having 50 percent interests. What benefits am I entitled to? What if we held title as joint tenants?
16. I received the disabled veterans' exemption after my first husband's death. Because I later remarried, I lost the benefits of the exemption. I am now divorced from my second husband. Am I allowed the exemption again?
17. Our home is receiving the disabled veterans' exemption; however, because of my husband's disability, he is now confined to a convalescent home. Will the exemption continue?
18. My husband and I owned and lived in our home which received the homeowners' exemption prior to his deployment overseas. He was severely injured and will not be able to return home; instead he needs to be confined to a care facility. Are we allowed the disabled veterans' exemption on our home even though my husband did not qualify at the time he was living there and now may never return to live there?

Partial Ownership Interests

19. A roommate and I purchased a home in which we each own a 50 percent interest. As a qualified disabled veteran, am I entitled to only 50 percent of the basic disabled veterans' exemption or am I allowed the entire exemption as to my half? Is my co-owner allowed the homeowners' exemption on her 50 percent interest?
20. My friend and I both have a 100 percent disability rating from the USDVA. In October 2006, we purchased a duplex where we live on one side and a hired caregiver lives on the other side rent free. We each have 50 percent ownership of the $450,000 property. How much exemption are we entitled to receive?
21. My husband died two years ago while on active duty. We had lived in a rental home, but now my sisters and I would like to buy a condo and live there together. Can I now qualify for the disabled veterans' exemption even if I only own one-third of the property?

Qualifying Properties

22. I purchased a home in November 2006 for $250,000 that was benefiting from the disabled veterans' exemption. Will I benefit from that exemption until the end of the 2006-2007 fiscal year even though I am not a disabled veteran?
23. I purchased a vacant parcel where I plan to have my home built. Can I apply the disabled veterans' exemption on the land now?
24. I live in a manufactured home which is subject to the vehicle license fee that is situated on land that I own. Can I receive the disabled veterans' exemption on the license fee? What about the land?
25. Because of my recent disability, I now live with my parents. While I was in active duty, I received the homeowners' exemption on my home, which my brother lived in rent-free while I was absent. The home is now vacant and available for rent. Am I still allowed to receive the disabled veterans' exemption on my house? If not, can the exemption apply to my parents' house since I am now living there?
26. I am a widower of a disabled veteran who died in October 2006. I didn't receive eligibility papers until August 2007. Meanwhile, in April 2007 I sold and moved-out of the home my husband and I lived in and purchased another one. I know the new house is eligible for the exemption, but can I still get the exemption on the house I sold?

Low-income Eligibility

27. I qualify for the low-income disabled veterans' exemption. The income limit used to be $40,000, but since 2002 the income limit has been increasing every year. Additionally, my exemption was previously $150,000 but this has also been increasing since 2006. For 2008, the exemption amount is $166,944. How does that work?
28. I am an unmarried surviving spouse of a deceased veteran with two children. In determining whether or not I qualify for the low-income disabled veterans' exemption, do I include the amount of veterans' benefits paid to me and my children in the calculation of household income?
29. I have been granted the $100,000 disabled veterans' exemption since January 1, 2005. In May 2006, I realized that I could have qualified for the low-income exemption of $150,000 instead. Can I be granted the difference between the exemption amounts from 2005 to 2007?

Supplemental Assessment

30. Does the disabled veterans' exemption apply to supplemental assessments?
31. I purchased a home in February 2006 and received two supplemental bills. Am I allowed the disabled veterans' exemption on both supplemental assessments?
32. I am a first-time home buyer of a $260,000 home that was receiving the $7,000 homeowners' exemption on an assessed value of $140,000. I moved in September 2007, and shortly received a supplemental assessment for $120,000. How will my basic $100,000 disabled veterans' exemption be applied?
33. I am a first-time claimant for the disabled veterans' exemption on a $200,000 home that I purchased in October 2006. The home is assessed at $160,000 on the current roll resulting in a supplemental assessment for $40,000. The exemption of $103,107 negated the supplemental assessment, but since I did not use the entire exemption, can the excess be applied to the prorated property taxes I had to pay in escrow for the 2006-2007 year?
34. I am currently receiving the low-income disabled veterans' exemption on my home, which is assessed at $105,000. A friend built an enclosed patio and enlarged a bathroom for me. Do I need to file another claim form for the exemption on the addition?
35. I purchased a new home in January 2007, but neglected to file for my disabled veterans' exemption within 30 days of receiving the supplemental tax bill. What will my late-filing penalty be?
36. I purchased a home in September 2006 and filed for the low-income disabled veterans' exemption on January 6, 2007. Because I filed late, the county assessor granted 85 percent of the exemption on the 2006-2007 regular roll. I later received a supplemental assessment notice in April 2007 for $210,000. Since I already filed for the exemption in January, will I be allowed the remaining 15 percent of the exemption on the supplemental tax bill?

Effective Date

37. My husband was killed while on active duty in May 2006, and I applied for the disabled veterans' exemption. When will the exemption go into effect?
38. I sold my home that was receiving the disabled veterans' exemption and moved into another home that I purchased. Am I allowed the exemption on my new home right away or do I have to wait for the next lien date (January 1)?
39. My brother and I purchased a rental property many years ago. I am a disabled veteran, and in March 2007 I plan to move into the rental property myself as my permanent home. When can I file a disabled veterans' exemption claim form and when does the exemption go into effect?
40. I purchased my home on February 2, 2007, and I filed for the disabled veterans' exemption on September 8, 2007, as a newly qualified disabled veteran. To what extent would the exemption apply to me?
41. I have owned and resided in my home since 2005. The USDVA qualified me as 100 percent disabled due to a service-connected injury as of March 10, 2007. When does my exemption go into effect?

Delayed Disability Rating

42. I could have received the disabled veterans' exemption as of last lien date but the Veterans' Administration has not finished processing my disability rating certification. It's been over a year since I applied for the rating. Are there any retroactive provisions for the exemption once I get my rating?
43. I filed for a disability rating with the Department of Veterans' Administration in May 2005, and finally in October 2006 I received a 100 percent rating effective as of March 1, 2005. I filed within 30 days of receiving the rating for the basic disabled veterans' exemption on my condo that was assessed for $122,000 in 2004. What exemption and refunds am I entitled to receive?

Disabled Veterans’ Claim Filing

44. I have recently become eligible for the disabled veterans' exemption due to a service- connected injury. Where can I get the proper forms and instructions to file for the exemption?
45. Do I have to file for the disabled veterans' exemption annually?
46. What is the filing period for the disabled veterans' exemption?
47. How does one notify the county assessor that the property is no longer the principal place of residence or that one no longer qualifies for the exemption?
48. Prior to purchasing a mobilehome in October 2002 for $65,000, I had been renting an apartment. I never paid property taxes on my mobilehome because I was waiting for my veteran's disability rating, which I received in June 2003. However, I never got around to filing for the exemption. The effective date of my disability is May 20, 2001. What can I do now to get my exemption for 2001 through 2007?
49. I was a qualified disabled veteran when I purchased a home in 2002. I lived in it until 2006 at which time I sold it and moved away. Now I have found out that I could have qualified for the disabled veteran exemption. Can I claim the exemption now to receive a refund?

VETERANS’ EXEMPTION

50. My wife and I are receiving a pension because our son died while he was on active duty in the military. For the veterans' exemption, what property counts towards the $10,000 personal wealth limit?
51. Must a veteran reside in the property to qualify for the veterans' exemption?
52. I have previously received the veterans' exemption on my boat. On the lien date of this year, I was temporarily living in Arizona with my son. Am I still allowed the exemption on my boat stored in California?
53. I became eligible for the veterans' exemption in September. Am I allowed a proration of the exemption for the year?

Veterans’ Exemption Claim Filing

54. Do I only file once for the veterans' exemption?
55. What form do I use for the veterans' exemption?
56. What is the filing period for the veterans' exemption?
57. I was actively serving overseas during the filing periods over the past two years. I am back in California now. Can I still file for the veterans' exemption for the last two years? Will I be assessed a late filing penalty?
58. I still have questions about the disabled veterans' and veterans' exemption. Where can I find more information?

1. Are there any property tax exemptions for veterans?

There are two separate property tax exemptions:

1) $4,000 real or personal property exemption for a veteran who owns limited property; or

2) $100,000 basic or $150,000 low-income exemption on the principal place of residence of a disabled veteran (in lieu of the homeowners' exemption). As of 2006, these exemption amounts are annually adjusted for the cost of living index.

2. There is a big difference between the veterans' exemption and the disabled veterans' exemption. Can you explain each one?

Veterans' Exemption

The California Constitution provides a $4,000 real property (for instance, a home) or personal property (for instance, a boat) exemption for honorably discharged veterans or the spouse or pensioned parent of a deceased, honorably discharged veteran. Most persons, however, are disqualified from this exemption due to restrictions on the value of property a claimant may own. A person who owns property valued at $5,000 or more ($10,000 or more for a married couple or for the unmarried surviving spouse of a qualified veteran) is not eligible for this exemption. Thus, a veteran who owns a home would most likely not qualify for the veterans' exemption.

Disabled Veterans’ Exemption

The California Constitution and Revenue and Taxation Code section 205.5 provide a property tax exemption for the home of a disabled veteran or an unmarried spouse of a deceased disabled veteran.

There is a basic $100,000 exemption or a low-income $150,000 exemption* available to a disabled veteran who, because of an injury incurred in military service:

• is blind in both eyes, or
• has lost the use of two or more limbs, or
• is totally disabled as determined by the United States Department of Veterans Affairs (USDVA) or by the military service from which the veteran was discharged.

An unmarried surviving spouse may also be eligible if the service person died as the result of a service-connected injury or a disease incurred while on active duty in the military. In other words, a veteran may not have been eligible during his or her lifetime, but the surviving spouse may become eligible for the exemption upon the veteran's death.

Unlike the veterans' exemption, the disabled veterans' exemption has no personal wealth cap requirements. The exemption is only available on a veteran's principal place of residence. The home may only receive one property exemption. Thus, if a homeowners' exemption has been granted on a property and the owner subsequently qualifies for the disabled veterans' exemption, the homeowners' exemption should be cancelled to allow for the disabled veterans' exemption as it provides the greater benefit.

The issues regarding these exemptions are complex, and the eligibility requirements are specific. Your local assessor's office should be consulted for detailed requirements regarding these exemptions.

* Both exemption amounts are annually adjusted for cost of living index; as of January 1, 2008, the exemption amounts are $111,296 and $166,944 respectively; and for 2009, the amounts will be $114,634 and $171,952.

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3. Can a person receive the disabled veterans' exemption (or veterans' exemption) and the homeowners' exemption at the same time?

   Where the disabled veterans' exemption is concerned, the answer is no, you are only entitled to have one or the other exemption. The disabled veterans' exemption provides much more benefit than the $7,000 homeowners' exemption. Given the choice, the claimant should choose the disabled veterans' exemption over any other property exemption as it would provide the greater benefit (for example, terminate an existing $7,000 homeowners' exemption upon qualifying for the $100,000 or $150,000 disabled veterans' exemption).

   Where the veterans' exemption is concerned, the answer is generally no. Notwithstanding the fact a veteran would, in most all cases, not be eligible for the exemption if he or she owns a house due to the limitations on property ownership to qualify for the veterans' exemption, the same dwelling may not receive both the homeowners' exemption and the veterans' exemption. The $7,000 homeowners' exemption provides more benefit than the $4,000 veterans' exemption, and is the preferred choice if one must choose between the two. However, there are some very rare instances where an owner may legally hold the veterans' exemption and a homeowners' exemption simultaneously. For example, a married veteran may live in a home with a low base year value in which he has a very small partial interest and own a small boat. If the total of all his assets are valued at no more than $10,000, the veteran may, in this case, receive both the veterans' and the homeowners' exemption. If you think your situation may apply, you should discuss this issue with your local assessor's staff.

4. Is a veteran of the National Guard eligible for the veterans' or disabled veterans' exemption? The military services listed in Section 3(o) of the California Constitution only include the Army, Navy, Air Force, Marines, Coast Guard, or Revenue Marine (Revenue Cutter) Service.

Yes, the United States National Guard or National Guard Reserves are a component of the United States Army (the Army National Guard) and the United States Air Force (the Air National Guard).

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DISABLED VETERANS’ EXEMPTION

5. On what basis is the disabled veterans' exemption annually adjusted?

There are two areas in the disabled veterans' exemption that provide for annual adjustments for inflation (Revenue and Taxation Code section 205.5, subdivisions (g) and (h)):

1)  the exemption amount for the basic and low-income exemption; and
2)  the household income limit for the low-income disabled veterans' exemption.

For each assessment year, both the exemption amount and the income limit are compounded annually by an inflation factor based upon the California Consumer Price Index (CCPI).

The State Board of Equalization annually provides the exemption amounts and household income limits for the upcoming year and prior years in a Letter To Assessor which may be found at the Board's website:  www.boe.ca.gov and by following the links: 1) Property Tax;  2) Letters To Assessors;  3) choose year of letter desired; 4) click the letter titled Disabled Veterans' Exemption Increases for 20__ (this is the link for the 2008 amounts – other years are available by choosing the desired year in step #3).

6. For purposes of the disabled veterans' exemption, what is the definition of "totally disabled"?

The United States Department of Veterans Affairs or the military service from which the veteran was discharged must have either:

• rated a veteran's disability at 100 percent or
• rated the disability compensation at 100 percent because the veteran is unable to secure or follow a substantially gainful occupation.

In this discussion, totally disabled means the same as 100 percent disabled or a person with 100 percent disability rating.

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7. I have just been granted the disabled veterans' exemption on my mobilehome, which is assessed at $58,000. Since I qualify for the basic $100,000 exemption, will the excess be applied to the special assessments or direct levies on my tax bill?

No. Exemptions are only applied to ad valorem property taxes (a tax based on the value of property). Direct levies, special taxes, and special assessments are not property taxes under the law because they are not based upon the assessed value of the property. Most entities making such levies are completely independent, and while their revenues may be collected with your county's property tax bills, the county itself has no jurisdiction over most of those levies or the agencies issuing them.

Qualifying Claimants

8. I have a friend who is receiving both a pension and the $4,000 veterans' exemption on his boat because his unmarried son died while serving in Iraq. My son, who lived with me until he left for the service, was also killed. Am I eligible for the disabled veterans' exemption on my home?

No. Unlike the veterans' exemption, the disabled veterans' exemption is not available to parents of a deceased veteran, but is only available to an unmarried spouse upon the veteran's death. A parent of an unmarried deceased veteran is only eligible for the $4,000 veterans' exemption if he or she receives a pension because of the veteran's service.  Additionally, because you own a home, it is likely that you would not qualify for the veterans' exemption due to limitations of property ownership.

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9. I am a veteran with an 80 percent disability rating. Would I be allowed 80 percent of the disabled veterans' exemption?

No. A disability rating of 100 percent is required to be eligible for the exemption. Unfortunately, there are no partial allowances for a rating less than 100 percent.

10. I am a disabled veteran living in a home in which legal title is in a corporate entity. As a shareholder of the corporation, I am entitled to occupy the home as my principal place of residence. Am I eligible for the disabled veterans' exemption on the home?

Yes, the disabled veterans' exemption differs from the regular homeowners' exemption in that a corporation may hold legal title to a dwelling and still receive the exemption.  Any reduction of property taxes paid by the corporation must reflect an equal reduction in any charges by the corporation to you because you made the property tax reduction possible for the corporation. In other words, you must benefit from the exemption, not the corporation.

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11. Will I still be entitled to the disabled veterans' exemption if my wife and I created a revocable trust where our children hold title to the property as trustees and we as the beneficiaries?

Provided that you still meet all the other requirements for the exemption, you would still be entitled to the exemption. The trustee takes only bare legal title to the trust property and does not become an owner in the normal sense, whereas you and your wife as the beneficiaries have an equitable estate in the trust property.

12. My husband contracted an infectious disease while in the service. He received a 30 percent disability rating from the USDVA, which did not provide eligibility for the disabled veterans' exemption. He recently died as a result of the disease. Am I now eligible for the exemption?

Yes. Revenue and Taxation Code section 205.5, subdivision (c)(1)(B), provides that if you are the unmarried surviving spouse of the veteran who died from a service-connected injury or disease, you are eligible for the exemption even though your husband did not qualify during his lifetime. You must provide a letter to your county assessor from the Veterans' Administration certifying that your husband's cause of death was a service-connected injury or disease.

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13. I have been receiving the disabled veterans' exemption as an unmarried surviving spouse for many years. Since I will be 58 next year, may I remarry and still receive the exemption?

No. Once you remarry, regardless of age, you will no longer qualify for California's disabled veterans' property tax exemption. There are some federal laws, however, that allow a surviving spouse to continue receiving federal benefits if they remarry after the age of 57.

14. My disabled veteran husband and I are currently renting a home. I just inherited a house which is in my name only. If we move into that house, can my husband receive the disabled veterans' exemption even though his name is not on the title?

Yes, your disabled veteran husband may receive the exemption even for property owned by you as your separate property, so long as it is you and your husband's principal place of residence.

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15. Is my registered domestic partner regarded the same as my spouse for the disabled veterans' exemption? We purchased a home for $180,000, each having 50 percent interests. What benefits am I entitled to? What if we held title as joint tenants?

The California Constitution and section 205.5 of the Revenue and Taxation Code specifically states that under certain circumstances, a spouse's property may qualify for the exemption or that a spouse may receive benefits upon the disabled veterans' death. For the disabled veterans' exemption, your domestic partner is not considered a spouse. Therefore, the exemption available to you would be up to 50 percent of your interest, or $90,000 in your case.

16. I received the disabled veterans' exemption after my first husband's death.  Because I later remarried, I lost the benefits of the exemption. I am now divorced from my second husband. Am I allowed the exemption again?

Upon divorce or death of a new spouse, the once qualified surviving spouse of a qualified veteran may again receive the disabled veterans' exemption.

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17. Our home is receiving the disabled veterans' exemption; however, because of my husband's disability, he is now confined to a convalescent home. Will the exemption continue?

Yes. As long as your husband occupied the home immediately prior to his confinement, the exemption will remain in continuous effect.

18. My husband and I owned and lived in our home which received the homeowners' exemption prior to his deployment overseas. He was severely injured and will not be able to return home; instead he needs to be confined to a care facility. Are we allowed the disabled veterans' exemption on our home even though my husband did not qualify at the time he was living there and now may never return to live there?

Yes, your home would qualify for the exemption. Section 205.5(b)(2) states that a property that would have been a veteran's principal place of a residence, were it not for the fact the veteran was confined to a hospital or other care facility, is considered the veteran's principal place of residence, provided the home is not rented out to a third party.

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Partial Ownership Interests

19. A roommate and I purchased a home in which we each own a 50 percent interest. As a qualified disabled veteran, am I entitled to only 50 percent of the basic disabled veterans' exemption or am I allowed the entire exemption as to my half? Is my co-owner allowed the homeowners' exemption on her 50 percent interest?

You are entitled up to the full amount of the basic ($100,000) or low-income ($150,000) exemption regardless of the percentage interest you hold in the property. The exemption is not reduced by 50 percent to $50,000 because you only have 50 percent interest in the property. However, the exemption amount may not exceed your share of the value of the home. For example, if the purchase price was $180,000, your 50 percent interest would only provide you with a $90,000 exemption (the lesser of $100,000 or one-half of $180,000).

Only one exemption per property is allowed. If you are granted the disabled veterans' exemption, the homeowners' exemption is not available on the same property, even if a co-owner qualifies for it.

20. My friend and I both have a 100 percent disability rating from the USDVA. In October 2006, we purchased a duplex where we live on one side and a hired caregiver lives on the other side rent free. We each have 50 percent ownership of the $450,000 property. How much exemption are we entitled to receive?

Revenue and Taxation Code section 205.5, subdivision (f), allows for one exception to the provision that no other exemption may be granted on the same property: if two or more qualified veterans co-own a property in which they reside, each are entitled to the exemption to the extent of their interest. Thus, both of you may claim the exemption on the one side of the duplex in which you reside. No exemption is allowed for the other side, regardless if rent is paid or not. If both sides are identical in value, then the exemption will be applied to one half of the $450,000 value for the side you live in. Each of you will be granted $103,107 (the basic exemption for 2006) on $112,500 (one-half of $225,000, since you own equal interests in the property).

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21. My husband died two years ago while on active duty. We had lived in a rental home, but now my sisters and I would like to buy a condo and live there together. Can I now qualify for the disabled veterans' exemption even if I only own one-third of the property?

Yes, as long as you have not remarried, you qualify for the exemption. However, the exemption amount is only to the extent of the interest owned by you. For example, if the assessed value of the condo is $180,000 and your one-third interest in the property is equally divided, an exemption amount of $60,000, rather than $100,000 would be granted. On the other hand, if the condo is assessed at $300,000 or more, then the entire $100,000 exemption amount may be applied.

Qualifying Properties

22. I purchased a home in November 2006 for $250,000 that was benefiting from the disabled veterans' exemption. Will I benefit from that exemption until the end of the 2006-2007 fiscal year even though I am not a disabled veteran?

No. Pursuant to Revenue and Taxation Code section 276.3, when a property that was receiving a disabled veterans' exemption is sold or transferred and the buyer is not eligible for the exemption, the exemption shall cease to apply on the date of that sale or transfer. Furthermore, termination of the exemption will be treated as an escape assessment and you will be responsible for the increased taxes (as prorated) since you do not qualify for the exemption that was in effect.

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23. I purchased a vacant parcel where I plan to have my home built. Can I apply the disabled veterans' exemption on the land now?

No. The exemption is only permitted for a principal place of residence. However, if you place a manufactured home or mobilehome on the land where you will live while your home is being built, then the property could qualify for the disabled veterans' exemption. The exemption would first apply to the improvement, then to the land. If the mobilehome is subject to the vehicle license fee, the exemption is applied to the land only.

24. I live in a manufactured home which is subject to the vehicle license fee that is situated on land that I own. Can I receive the disabled veterans' exemption on the license fee? What about the land?

The disabled veterans' exemption is not applicable to the vehicle license fee. The exemption, however, may apply to the land. If personal property, such as a manufactured home or houseboat, is subject to personal property taxes, it can qualify for the exemption if you meet all the qualifications.

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25. Because of my recent disability, I now live with my parents. While I was in active duty, I received the homeowners' exemption on my home, which my brother lived in rent-free while I was absent. The home is now vacant and available for rent. Am I still allowed to receive the disabled veterans' exemption on my house? If not, can the exemption apply to my parents' house since I am now living there?

The disabled veterans' exemption is allowed only on an owner-occupied residence. The homeowners' exemption was extended to you while you were serving in the military because you were temporarily absent from, and expected to return to the home that you owned, and it was not used as a rental. Since you no longer live in your home, the exemption no longer applies. Your parents' home would be eligible for the exemption if you were also on the title as one of the owners; otherwise the exemption would not apply.

26. I am a widower of a disabled veteran who died in October 2006. I didn't receive eligibility papers until August 2007. Meanwhile, in April 2007 I sold and moved-out of the home my husband and I lived in and purchased another one. I know the new house is eligible for the exemption, but can I still get the exemption on the house I sold?

Yes, you are eligible for a refund on your previous home from the date of your husband's death until the date you sold your home in April 2007. The exemption on you new home is effective as the date you purchased your new home, provided you moved-in within 90 days of closing escrow.

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Low-income Eligibility

27. I qualify for the low-income disabled veterans' exemption. The income limit used to be $40,000, but since 2002 the income limit has been increasing every year. Additionally, my exemption was previously $150,000 but this has also been increasing since 2006. For 2008, the exemption amount is $166,944. How does that work?

The income threshold for the low-income disabled veterans' exemption, as well as the dollar amount for the basic and low-income disabled veterans' exemption, increases annually due to inflation. The inflation factor is based on the California Consumer Price Index.

The $40,000 low-income threshold initially increased in 2002, and the income limit has since increased for 2008 to $49,979. The initial increases to the exemption amounts began in 2006. The income-level limitation and exemption amounts for the upcoming year may be found in a Letter To Assessor which may be found at the Board's website: www.boe.ca.gov and by following the links: 1) Property Tax; 2) Letters To Assessors; 3) choose year of letter desired 4) click the letter titled Disabled Veterans' Exemption Increases for 20__ (this link is for the 2009 amounts).

28. I am an unmarried surviving spouse of a deceased veteran with two children. In determining whether or not I qualify for the low-income disabled veterans' exemption, do I include the amount of veterans' benefits paid to me and my children in the calculation of household income?

Yes, all such benefits are included in the determination of your household income. The dependency and indemnity compensation (DIC) benefits paid to you for each dependent minor child are included in household income even though increased benefit payments are a result of the existence of such a child. They are benefits to which the surviving spouse is entitled to receive; they are not the dependent child's separate benefit. However, any income received by the minor himself or herself should not be included in the calculation of household income. Please see the claim for exemption form, BOE-261-G, Claim for Disabled Veterans' Property Tax Exemption, under "Instructions for Statements" to determine what constitutes "household income" in qualifying for the low-income disabled veterans' exemption.

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29. I have been granted the $100,000 disabled veterans' exemption since January 1, 2005. In May 2006, I realized that I could have qualified for the low-income exemption of $150,000 instead. Can I be granted the difference between the exemption amounts from 2005 to 2007?

Yes, you are entitled to an increased exemption based on the difference between the two exemption amounts. You must re-file the claim form and follow the instructions on the first paragraph on the back side of the form under "Statements."

If you file the claim on or before December 10, 2007, you will be allowed 90 percent of the difference for 2007, and 85 percent of the difference for 2005 and 2006. Beginning in 2006, the amount of the exemption is adjusted for inflation; thus, the added exemption is calculated as follows:

2007
$161,420 (low-income exemption amount)  -  $107,613 (basic exemption amount)
  = $  53,807  x 90% late filing = $48,426 

2006
 $154,661 (low-income exemption amount)  -  $103,107 (basic exemption amount) 
           = $  51,554  x 85% late filing = $43,821 

2005
 $150,000 (low-income exemption amount) - $100,000 (basic exemption amount) = 50,000 x 85% late filing = $42,500

Supplemental Assessment

30. Does the disabled veterans' exemption apply to supplemental assessments?

Yes. The amount of the exemption, however, will be reduced by any existing exemption that may currently exist on the property and only to the amount of the supplemental assessment or the disabled veterans' exemption, whichever is less. See question #32 for an example.

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31. I purchased a home in February 2006 and received two supplemental bills. Am I allowed the disabled veterans' exemption on both supplemental assessments?

Yes. One supplemental assessment was for the current fiscal year (July 1, 2005 to June 30, 2006) to reflect the change in value between March (the month after you purchased the home) and June 30, 2006. The second supplemental reflects the change in value from what was put on the roll as of the January 1, 2006 lien date for the ensuing fiscal year (July 1, 2006 to June 30, 2007).

32. I am a first-time home buyer of a $260,000 home that was receiving the $7,000 homeowners' exemption on an assessed value of $140,000. I moved in September 2007, and shortly received a supplemental assessment for $120,000. How will my basic $100,000 disabled veterans' exemption be applied?

The exemption may be applied to the supplemental assessment. However, because the property already received the $7,000 homeowners' exemption on the current roll, only $96,107 of the $103,107* disabled veterans' exemption may be applied to the supplemental assessment, resulting in a net supplemental assessment of $23,893. The calculations are as follow:

$107,613 - $  7,000 = $100,613       Net exemption amount available
$120,000 - $100,613 = $19,387       Net supplemental assessment

* 2007's basic $100,000 exemption, as adjusted for inflation

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33. I am a first-time claimant for the disabled veterans' exemption on a $200,000 home that I purchased in October 2006. The home is assessed at $160,000 on the current roll resulting in a supplemental assessment for $40,000. The exemption of $103,107 negated the supplemental assessment, but since I did not use the entire exemption, can the excess be applied to the prorated property taxes I had to pay in escrow for the 2006-2007 year?

Yes. The unused portion of your exemption may be applied to the regular roll. You must file with the county for a refund of taxes already paid.

34. I am currently receiving the low-income disabled veterans' exemption on my home, which is assessed at $105,000. A friend built an enclosed patio and enlarged a bathroom for me. Do I need to file another claim form for the exemption on the addition?

No. If you already have a claim on file for the property on the current roll, you do not need to file again. The county assessor will assess the new construction and apply the $56,420 excess exemption amount ($161,420* - $105,000) to your supplemental taxes. If the assessed value of the new construction exceeds the excess exemption, you will be billed for the net supplemental taxes owed.

* 2007's low-income exemption, adjusted for inflation

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35. I purchased a new home in January 2007, but neglected to file for my disabled veterans' exemption within 30 days of receiving the supplemental tax bill. What will my late-filing penalty be?

The full exemption amount is available only if you file within 30 days of receiving the supplemental tax bill.

• If you file on or before the date on which the first installment of taxes on the supplemental tax bill becomes delinquent, you will be allowed 90 percent of the amount of the exemption.
• If you file after the date on which the first installment of taxes on the supplemental tax bill becomes delinquent, 85 percent of the amount of the exemption will be allowed.

Check your supplemental tax bill for the date on which the first installment of taxes on the supplemental tax bill becomes delinquent, as the date will vary depending on when you received the bill.

36. I purchased a home in September 2006 and filed for the low-income disabled veterans' exemption on January 6, 2007. Because I filed late, the county assessor granted 85 percent of the exemption on the 2006-2007 regular roll. I later received a supplemental assessment notice in April 2007 for $210,000. Since I already filed for the exemption in January, will I be allowed the remaining 15 percent of the exemption on the supplemental tax bill?

Yes. Since you received 85 percent of the exemption on your regular bill and your supplemental bill was received after you filed for the exemption, you are considered to have timely filed on your supplemental bill. The remaining 15 percent of the exemption may be applied to your supplemental bill.

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Effective Date

37. My husband was killed while on active duty in May 2006, and I applied for the disabled veterans' exemption. When will the exemption go into effect?

Senate Bill 1637 added Revenue and Taxation Code section 276.1(b) to allow any person who became eligible for the disabled veterans' exemption on or after January 1, 2007 to receive the benefits of the exemption as of the effective date of the disability.

Prior to the statute amendment, a person must have met the qualifications as of the lien date to receive the benefits for the ensuing fiscal year. Thus, under the old law, you would have met the qualifications as of January 1, 2007, and the exemption would have applied to your 2007-2008 tax bill (July 1, 2007 to July 31, 2008), 14 months after your husband died. However, due to the addition of section 276.1(b), the Board has specified that for those who became eligible for the exemption during 2006, as in your case, the benefits of the exemption will go into effect January 1, 2007, prorated for the remainder of the current fiscal year ending June 30, 2007.

38. I sold my home that was receiving the disabled veterans' exemption and moved into another home that I purchased. Am I allowed the exemption on my new home right away or do I have to wait for the next lien date (January 1)?

The effective date of the exemption on your new home is the date you move in, and termination of the exemption on your previous home is as of the date it no longer is your permanent place of residence. You must file form BOE-261-GNT, Disabled Veterans' Exemption Change of Eligibility Report, with your county assessor to terminate the exemption on your old home and file a claim for your new home using form BOE-261-G.

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39. My brother and I purchased a rental property many years ago. I am a disabled veteran, and in March 2007 I plan to move into the rental property myself as my permanent home. When can I file a disabled veterans' exemption claim form and when does the exemption go into effect?

As of January 1, 2007, a property that was previously owned, but not occupied by the qualified disabled veteran, may receive the exemption as of the date the property becomes eligible (when it becomes the veteran's primary residence). Other mid-year eligibility may take place upon:

• purchasing a home in which a qualified veteran will live; or
• a veteran becoming eligible while already living in a residence; or
• upon the death of a serviceperson who died as a result of a service-connected injury or disease, whereby the spouse receives the exemption.


40. I purchased my home on February 2, 2007, and I filed for the disabled veterans' exemption on September 8, 2007, as a newly qualified disabled veteran. To what extent would the exemption apply to me?

If your disability rating was effective prior to your buying your home, the exemption amount will be prorated from the date the property became eligible for the exemption. If your disability rating became effective after the purchase, the exemption will be prorated as of the effective date of your disability. Since you filed for the exemption timely, that is, before the next lien date (January 1, 2008), the full prorated exemption amount is available to you.

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41. I have owned and resided in my home since 2005. The USDVA qualified me as 100 percent disabled due to a service-connected injury as of March 10, 2007. When does my exemption go into effect?

The exemption is effective as of the date of your disability rating, March 10, 2007. You should still pay the second installment of your taxes owed for the 2006-2007 fiscal year that is due April 10, 2007. You will receive a partial refund of taxes for the period March 10, 2007 through June 30, 2007 after taking the exemption into consideration. You must submit your claim form to your county assessor prior to the next lien date following the calendar year in which you became eligible (January 1, 2008, in your case) to receive 100 percent of the prorated exemption.

Delayed Disability Rating

42. I could have received the disabled veterans' exemption as of last lien date but the Veterans' Administration has not finished processing my disability rating certification. It's been over a year since I applied for the rating. Are there any retroactive provisions for the exemption once I get my rating?

Yes. Revenue and Taxation Code section 276.1 provides that the retroactive period begins from the effective date of your disability rating. Rather than receiving a partial exemption when you file late due to the delayed disability rating, the full amount of the disabled veterans' exemption may be granted. The county assessor will cancel or refund the amount of taxes, subject to a four-year limitation (Revenue and Taxation Code section 5097), including any interest and penalties, on your property's assessed value that would have been exempt had you filed the claim timely. For a 100 percent exemption, you must file the claim with the county assessor within 30 days after you receive the disability rating, or on or before the next lien date, whichever occurs later.

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43. I filed for a disability rating with the Department of Veterans' Administration in May 2005, and finally in October 2006 I received a 100 percent rating effective as of March 1, 2005. I filed within 30 days of receiving the rating for the basic disabled veterans' exemption on my condo that was assessed for $122,000 in 2004. What exemption and refunds am I entitled to receive?

Your exemption falls under the provisions of section 276.1, delayed disability rating. You are entitled to receive the full amount of the exemption as of the effective date of your disability rating, March 1, 2005. There is no proration of the dollar amount; thus, the $100,000 exemption in 2005 will apply to your 2004-2005 assessed value. Your property tax reduction, however, is prorated from the date the property became eligible for the exemption.

Your 2004-2005 prorated exemption and taxes would be calculated as follows:

$100,000 exemption / 365 days = $273.97 exemption/day

$273.97 exemption/day x 122 days eligible (March 1 – June 30, 2005) = $33,425 prorated exemption = $33,425 exemption amount

$122,000 assessed value - $33,425 exemption = $88,575 net taxable value

$88,575 x 1% tax rate (estimate) = $885.75 taxes owed

Previously paid taxes based on $122,000 assessed value = $1,220 x 1% = $1,220.

$1,220 – $885.75 taxes owed after applying exemption = $334.25 refund due

For 2005 and 2006, your refund will be based on $100,000 and $103,107 exemption, respectively. (beginning in 2006, the exemption amount adjusted for the cost of living index) and the full exemption amount will be applied to the corresponding assessed values.

2005 - $100,000
2006 - $103,107
2007 - $107,613

Disabled Veterans' Claim Filing

44. I have recently become eligible for the disabled veterans' exemption due to a service- connected injury. Where can I get the proper forms and instructions to file for the exemption?

The claim form, titled Claim for Disabled Veterans' Property Tax Exemption (BOE-261-G), must be filed with the county assessor where your property is located. The form may be obtained from the county assessor's office, although some counties offer a downloadable form from their internet website. You may find the appropriate contact number for your county assessor's office in your telephone book or from the Board's property tax website under "Listings of County Assessors": http://www.boe.ca.gov/proptaxes/assessors.htm.

Your application must also include:

1. Your letter from the United States Department of Veterans Affairs (USDVA) (or from the military service which discharged you), certifying that you have a service-connected disability rating of 100 percent; and
2. Proof of honorable discharge (form DD-214) or other document indicating that you were honorably discharged. Generally, in order for a veteran to receive monetary benefits from the USDVA, the veteran must have been honorably discharged; thus documents showing the monetary benefits should suffice.

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45. Do I have to file for the disabled veterans' exemption annually?

For the basic disabled veterans' exemption, you need only file once. Once granted, the exemption is continuous unless you become ineligible because:

1. the property is no longer being used as your primary residence (sold or rented), or
2. your disability rating is lowered below 100 percent, or
3. you have regained the used of one or more limbs
4. you are no longer considered blind in both eyes
5. you, as the surviving spouse of deceased disabled veteran, have remarried.

For the low-income disabled veterans' exemption, annual filing is required to certify that your yearly household income for the prior calendar year does not exceed the maximum allowable income, as calculated, for the ensuing fiscal year.

46. What is the filing period for the disabled veterans' exemption?

To receive 100 percent of the basic or low-income exemption as of the date the claimant or the property qualifies, the initial claim must be filed between the date of qualification and on or before the next following January 1, or 30 days after the date of qualification, whichever is later.

For property generating a supplemental assessment when a property has recently been purchased or newly constructed, the filling period depends upon whether or not a supplemental assessment has been mailed to you. See question #35.

For the low-income exemption only, a claim must be filed with your county assessor each year. Following the initial claim, subsequent annual filing periods are as follows:

• Between January 1 and February 15 to receive 100 percent of the exemption;
• Between February 16 and December 10 to receive 90 percent of the exemption;
• Anytime after December 10 of the current year to receive 85 percent of the exemption.

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47. How does one notify the county assessor that the property is no longer the principal place of residence or that one no longer qualifies for the exemption?

Annually, the county assessor will mail a notice, form BOE 261-GNT, to all taxpayers who received the exemption in the preceding year. When applicable, the claimant must return this notice and provide the reason for the change in eligibility. If there is no change, the taxpayer may ignore the notice.

The notice also provides information on the qualifying and disqualifying conditions of the exemption, the annual adjusted threshold income limit for the low-income exemption, and the annually adjusted exemption amounts for both the basic and low-income exemptions.

48. Prior to purchasing a mobilehome in October 2002 for $65,000, I had been renting an apartment. I never paid property taxes on my mobilehome because I was waiting for my veteran's disability rating, which I received in June 2003. However, I never got around to filing for the exemption. The effective date of my disability is May 20, 2001. What can I do now to get my exemption for 2001 through 2007?

If you had filed a claim with the county assessor timely after you received your delayed disability rating (on or before the next following lien date of January 1, 2004), you would have been allowed 100 percent of the exemption as of May 20, 2001. However, since you did not file a claim timely, you are only eligible for a partial exemption of 85 percent from May 20, 2001 through December 2006. If you file a claim in 2007 before December 10, you will be granted 90 percent of the exemption for 2007; if not, you are entitled to only 85 percent of the exemption once you file a claim with the county assessor.

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49. I was a qualified disabled veteran when I purchased a home in 2002. I lived in it until 2006 at which time I sold it and moved away. Now I have found out that I could have qualified for the disabled veteran exemption. Can I claim the exemption now to receive a refund?

If your previous property meets all the qualifications of the exemption, the disabled veterans' exemption is available to you even if you already sold the property and no longer living there. Since you no longer own or live at the property, you must be able to demonstrate that you resided at the property during the periods you are seeking the exemption. Of course, refunds are only allowed up to the four years after the date of payment of taxes.

VETERANS' EXEMPTION

50. My wife and I are receiving a pension because our son died while he was on active duty in the military. For the veterans' exemption, what property counts towards the $10,000 personal wealth limit?

"Property," as used in this case, not only includes assessable property but also non-assessable property such as vehicles, household furnishings, cash, investments, and other personal effects.

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51. Must a veteran reside in the property to qualify for the veterans' exemption?

The veterans' exemption is available for both personal property (such as a boat) and real property (such as a house); thus, it is not necessary for the veteran to reside on a property in order to qualify for the veterans' exemption. In fact, in most cases, if the veteran owns a property that is a residence, whether a house, a boat, or a mobilehome, it is unlikely that he or she could pass the maximum $5,000/$10,000 eligibility wealth cap test (See question #2). Furthermore, if the veteran resides in the property, the preferred exemption would be the higher $7,000 homeowners' exemption.

52. I have previously received the veterans' exemption on my boat. On the lien date of this year, I was temporarily living in Arizona with my son. Am I still allowed the exemption on my boat stored in California?

If you did not actually have a place of residence in California on the lien date (you moved in with your son and were not just visiting), then the exemption would not be available to you until you establish residency in California again.

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53. I became eligible for the veterans' exemption in September. Am I allowed a proration of the exemption for the year?

No. Unlike the disabled veterans' exemption, there is no proration of the exemption for the year. You must be eligible as of the lien date each year (January 1).

Veterans' Exemption Claim Filing

54. Do I only file once for the veterans' exemption?

No. The veterans' exemption claim must be filed annually.

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55. What form do I use for the veterans' exemption?

The claim form titled Claim for Veterans' Exemption (BOE-261)must be filed with the county assessor where your property is located. You may find the appropriate contact number for the county assessor's office in your telephone book or from the Board's property tax website under "Listings of County Assessors"

56. What is the filing period for the veterans' exemption?

Claims must be annually filed with the county assessor between January 1 and February 15 to receive the full exemption. Late-filed claims are accepted between February 16 and December 10 for the lesser of $3,200 or 80 percent of the assessed value of the property. No exemption is available for claims submitted after December 10.

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57. I was actively serving overseas during the filing periods over the past two years. I am back in California now. Can I still file for the veterans' exemption for the last two years? Will I be assessed a late filing penalty?

If you were in the United States military serving outside of the country during the filing periods, you may still claim the exemption without regard to the prescribed time limits and without any penalty or interest.

58. I still have questions about the disabled veterans' and veterans' exemption. Where can I find more information?

If you still have questions about these two exemptions, you may call the Board's Assessment Services Unit at 916-445-4982.

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