Are You Getting All Your California Property Tax Breaks?

Either filing an appeal or claiming an exemption may reduce your California property tax burden.

A California homeowner's tax bill often dwarfs any other California tax owed, particularly for property purchased in recent years, when property values were high. If you own a California home, it's therefore in your interest to make extra sure that you’re not overpaying.

How can you reduce your California property tax burden? There are two main methods for doing so. The first is available to all homeowners. The second depends on whether you meet certain qualifications. If you meet those qualifications, you can seek tax relief using both methods.

Method #1 – Appeal the Taxable Value of Your Home

You may know that the California authorities compute your property tax by multiplying your home’s taxable value by the tax rate. The taxable value is normally set based on the purchase price, but California authorities may reassess that value under certain circumstances, such as after you've made major home improvements.

Example: The assessor has placed a taxable value of $200,000 on the Ikedas’ home. If the tax rate is 1%, they will owe $2,000 in property tax. The Ikedas appeal, and the appeals board reduces that value to $150,000. Now, the Ikedas owe only $1,500 in property tax.

If you believe that the tax assessor has misjudged the value of your home – or if the taxable value is higher than that of similar homes in your area – you might want to pursue an appeal. For more information, read Should You Challenge Your Property Tax Assessment in California?, and Procedures for Challenging Your Property Tax Assessment in California.

Method #2 –Get All the Tax Breaks You’re Entitled To

California allows for reduced property taxes if you meet certain requirements. The chief programs in California are summarized here.

  • Main residence. The first $7,000 of the full value of your home is exempt from property tax.
  • Veterans. If you’re a veteran who served in a war or campaign, you qualify for a $5,000 exemption if you’re single, or a $10,000 exemption if you’re married. A surviving spouse of such a veteran is also eligible for an exemption, and the parents of some veterans may qualify as well.
  • Disabled veterans. If you’re a disabled veteran, you may be entitled to a heftier exemption. The amount will depend on your age, income, and the nature of your disability.
  • Other disabled people. A homeowner who is blind or otherwise disabled may qualify for property tax assistance.
  • Senior citizens. If you’re 62 years old or older, you may qualify for property tax assistance, depending on your income.
  • Disaster relief. In some counties, if your home has been substantially damaged or destroyed by a disaster, you qualify for a reduced assessment until your home is repaired or restored. In a county that hasn’t adopted a disaster relief ordinance, you can ask the county assessor for a Proposition 8 reduction in your assessment.
  • Family transfers. If you acquire your principal residence from your parents or from your children, the property won’t be reassessed. This special treatment also applies if you acquire the home from your grandparents -- but only if both of your parents are deceased.

Contact your local tax assessor for complete details on these and other exemptions, including any required forms you need to complete and the deadline for filing those forms. You can get contact information for your county tax assessor from the California Board of Equalization list.

Depending on the complexity of your situation, you may want to seek legal help. To find an experienced real estate lawyer in California, check out Nolo’s Lawyer Directory.

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