Who Is Exempt From Paying Property Taxes in California?

In California, full or partial property tax relief is available to homeowners living in their primary residence, disabled veterans and some other veterans, qualifying seniors and people with disabilities, religious congregations, and nonprofits operating for charitable, hospital, scientific, or similar purposes. Understanding who is exempt from paying property taxes in California means recognizing that “exempt” rarely means paying nothing. For most people it means a reduction in the home’s assessed value, which then shrinks the tax bill. The size of that reduction, and whether it wipes out the bill entirely, depends on which category you fall into.

One thing applies across the board: these exemptions only touch the ad valorem portion of your tax bill, the part calculated from assessed value. Mello-Roos charges, special assessments, and other direct levies on a California tax bill are figured separately and are not reduced.¹

Homeowners Living in Their Primary Residence

The Homeowners’ Exemption is the one most Californians use. It reduces the taxable value of your home by $7,000, which at the state’s roughly 1% base rate saves about $70 a year. It covers single-family homes, condominiums, and manufactured homes occupied as a principal residence. Rental properties, vacation homes, and vacant lots do not qualify.²

You file once, using form BOE-266 from your county assessor or the Board of Equalization. Once approved, the exemption stays in place for as long as you own and occupy the home.²

Veterans

There are two separate programs for veterans, and they work very differently.

Standard Veterans’ Exemption

This provides a $4,000 reduction in assessed value, but tight asset limits put it out of reach for most homeowners. A single veteran cannot own more than $5,000 in total property, and a married veteran couple cannot exceed $10,000. It must be renewed every year. You can hold this and the Homeowners’ Exemption at the same time, but not on the same property.³

Disabled Veterans’ Exemption

This is the one that matters for most veterans who own a home. It is available to veterans rated 100% disabled from a service-connected injury or disease, and to the unmarried surviving spouse of a qualifying veteran. There is no partial credit for lower disability ratings, and eligibility for a surviving spouse ends on remarriage.⁴⁵

The exemption operates at two levels, both adjusted annually. For the 2026 lien date:

Basic exemption: $180,671 reduction in assessed value, available to all qualifying claimants regardless of income.
Low-income exemption: $271,009 reduction, available when total household income is $81,131 or less.

For a veteran whose home is assessed at or below the exemption amount, this can effectively eliminate the ad valorem bill. The claim form is BOE-261-G.⁶

Seniors and People with Disabilities

California does not have a general “senior exemption” that erases property tax. Instead, two programs help older homeowners and people with disabilities manage what they owe.

Property Tax Postponement

The Postponement Program lets you defer current-year property taxes rather than pay them. It is a loan from the state secured by a lien on your home, with 5% simple interest accruing until repayment.⁷

To qualify you must meet all of the following:

Be at least 62 years old, blind, or disabled
Own and occupy the home as your principal residence (floating homes and houseboats do not qualify)
Have at least 40% equity in the property
Have total household income of $55,181 or less (2025-26 fiscal year)
Not have a reverse mortgage on the property

The deferred balance comes due when you move, sell, transfer title, refinance, take out a reverse mortgage, allow future taxes to go delinquent, or die without a spouse or registered domestic partner still living in the home.⁷

Proposition 19 Base Year Value Transfers

Proposition 19 lets homeowners who are 55 or older, severely disabled, or victims of a Governor-declared disaster sell their primary residence and carry the home’s existing assessed value to a replacement home anywhere in California. Without it, the new purchase would be reassessed at market value and the tax bill could jump sharply.⁸

You have two years from the sale of the original home to buy or build the replacement, either before or after the sale. If the replacement costs the same as or less than the original’s sale price, the old assessed value transfers directly. If it costs more, the difference is added. The threshold for “equal or lesser value” is 100% of the original sale price if you buy first, 105% if you buy within the first year after selling, and 110% in the second year.⁸

An eligible homeowner can use the benefit up to three times. Victims of Governor-declared disasters face no limit.⁹

Churches and Nonprofit Organizations

Church Exemption

Property owned, leased, or rented by a religious organization and used exclusively for worship qualifies for the Church Exemption under Article XIII of the California Constitution and Revenue and Taxation Code section 206. It covers the worship space and parking areas reasonably needed for people attending services. A church that also runs a conference center, campground, or recreational facility on the same property has to look at the Welfare Exemption for those portions.¹⁰

Welfare Exemption

The Welfare Exemption is broader. It covers property used exclusively for religious, hospital, scientific, or charitable purposes when owned and operated by a qualifying nonprofit. Hospitals, museums, theaters, low-income housing, and educational facilities commonly fall under it.

Approval runs through two agencies. The organization first applies to the Board of Equalization for an Organizational Clearance Certificate confirming it meets the eligibility rules. The county assessor then evaluates whether the specific property is being used for a qualifying purpose.¹¹

The organization must be recognized as tax-exempt by the IRS or the California Franchise Tax Board, its founding documents must irrevocably dedicate its assets to a qualifying purpose, and if it dissolves, its property must pass to another nonprofit with a similar mission. The property cannot be used for the private benefit of any individual or corporation.

Solar Energy Installations

Adding solar panels to a home would normally count as new construction and trigger a reassessment. California’s Active Solar Energy System Exclusion prevents that: installing a qualifying system will not increase the assessed value of your existing property.¹²

Covered systems include those used for water heating, space conditioning, electricity production, and process heat. Solar pool heaters, hot tub heaters, passive solar systems, and wind systems do not qualify. The exclusion is scheduled to sunset on January 1, 2027 unless the legislature extends it.¹²

Property Damaged by Disaster

If your property is damaged or destroyed by a disaster, the county assessor can temporarily reduce its assessed value to reflect the loss. The county must have adopted an ordinance under Revenue and Taxation Code section 170, and the damage must total at least $10,000 in current market value.¹³

Relief can apply after a Governor-declared disaster or any other misfortune or calamity. The general filing deadline is 12 months from the date of the disaster, or the period set by the county’s ordinance, whichever is later. For several specific 2024-2025 fires, including the Palisades and Eaton Fires, the legislature extended the deadline to 24 months.¹⁴

Separately, homeowners whose properties qualify for the Homeowners’ or Disabled Veterans’ Exemption can defer their property tax installments after a Governor-declared disaster if the damage reaches at least $10,000 or 10% of fair market value, whichever is lower.¹³

Filing Deadlines and the Duty to Report Changes

Every exemption claim is filed with the county assessor where the property is located. To receive the full exemption for the fiscal year that starts July 1, file by 5:00 p.m. on February 15. A claim filed after February 15 but before December 10 generally qualifies for a partial exemption, typically 80% of the full amount. After December 10, no exemption applies for that year.¹⁵

The Homeowners’ Exemption is a one-time filing. The standard Veterans’ Exemption and several others require annual renewal.¹⁶

If you stop qualifying, you have to say so. For the Homeowners’ Exemption, that means filing an Advice of Termination with the assessor by December 10 of the year following the change in use, whether you moved out, converted the home to a rental, or something else. Failing to report doesn’t just end the exemption going forward. The assessor will issue an escape assessment for the taxes you should have been paying, plus a penalty of 25% of the escaped value.¹⁷ The same obligation applies to the Disabled Veterans’ Exemption when a surviving spouse remarries or a veteran’s disability rating changes.

1
California State Board of Equalization. Exemptions
2
California State Board of Equalization. Homeowners’ Exemption
3
California State Board of Equalization. Veterans’ Exemption
4
California State Board of Equalization. Disabled Veterans’ Exemption
5
California State Board of Equalization. Property Tax Savings: Disabled Veterans’ Exemption
6
California State Board of Equalization. LTA 2025/014, Disabled Veterans’ Exemption Increases for 2026
7
California State Controller’s Office. Property Tax Postponement Fact Sheet
8
California State Board of Equalization. Proposition 19
9
Sacramento County Assessor. Proposition 19 – Changes to Real Property Transfers
10
California State Board of Equalization. Church Exemption
11
California State Board of Equalization. Welfare and Veterans’ Organization Exemptions
12
California State Board of Equalization. Active Solar Energy System Exclusion
13
California State Board of Equalization. Information Guide for Disaster Relief for Damaged or Destroyed Property
14
California Legislative Information. California Revenue and Taxation Code 170
15
California Legislative Information. California Revenue and Taxation Code 255
16
California State Board of Equalization. Property Tax Forms for Use by County Assessors’ Offices and Local Appeals Boards
17
Legal Information Institute. California Code of Regulations Title 18 Section 135 – Homeowners’ Property Tax Exemption