Are Disabled Veterans Exempt From Property Taxes?
Watch This Video for an Easy Explanation & How to Submit The Forms
Almost all states offer a disabled Veterans property tax exemption amount on their primary residence.
California disabled Veteran’s property tax exemption will assist a Veteran’s family in affording more home. Now more than ever, this California property tax exemption will substantially reduce the tax burden for all Veterans in the state by reducing the home’s taxable value, resulting in tax savings for the Veteran.
The property tax exemption for disabled Veterans in California offers more advantageous terms than both the Veterans and Homeowners Exemptions explained below. Veterans who are rated at 100% disability by the VA, due to a service-connected disability are eligible for this California disabled Veteran’s property tax exemption. Those who are below the 100% rate but are compensated at the full rate due to unemployability are also eligible. In addition to the Veterans themselves, unmarried surviving spouses of service members who have died in the line of duty can also apply.
This property tax exemption for Veteran’s in California reduces the taxable value of an eligible Veteran’s home by over $100,000. This number is significantly higher for low-income Veterans who are disabled. Both the basic and low-income Disabled Veterans Exemptions follow a cost of living index, so the actual exemption amounts go up each year. The California Board of Equalization will have the latest numbers.
The California Constitution and Revenue and Taxation Code Section 205.5 provides a property tax exemption for the home of the disabled Veteran or an unmarried spouse of a deceased, disabled Veteran. Once again, this California property tax exemption is only available on the Veteran’s primary home or residence. An unmarried surviving spouse may also be eligible if the military service person passed away as a result of a service-connected injury or disease. This had to take place while the Veteran was on active duty or as the result of active duty.
Disabled Veterans may receive this property tax relief in California by qualifying for either the basic or low-income property tax exemption.
Again, they must be rated 100% disabled by the Department of Veterans Affairs due to a military service injury or illness. The California State Board of Equalization, Property Tax Department sets the maximum exemption amounts and household income limits for this program. These limits have increased every year since 2005. The basic exemption maximum exemption limit has grown from $100,000 in 2005 to $143,273 in 2020. The low-income maximum exemption limit has grown from $150,000 in 2005 to $214,910 in 2020. The income limit has grown from$44,907 in 2005 to $64,337 in 2020.
Although extremely important, this California property tax exemption information can be confusing to the disabled Veteran searching and applying for his benefits. A recent national survey of Veterans by the Government Accountability Office found 56% of respondents said, their understanding of available Veteran benefits was in the category of “a little” or “not at all.” It is obvious companies and service organizations need to do a better job of communicating these critical benefits to our courageous and deserving Veterans.
In California counties such as San Diego property tax exemption for Veterans can be a massive benefit, because these exemptions are lowering the cost of home ownership for entire communities. SoCal VA Homes sells homes in San Diego to VA buyers very frequently. This county is very Veteran “friendly,” as you may know.
Other Exemptions – The Veterans Exemption
The California Veterans Exemption may sound like the right option based on the name, but the fact is that most Veteran homeowners in the state are not eligible for it. This is because the program has tough restrictions on personal assets. If you own property valued at $5,000 or more, you won’t be eligible for the Veterans Exemption, even if you’ve been honorably discharged. While this number doubles for married couples, most Veterans who own homes in California will exceed this personal wealth limit.
The Homeowner’s Exemption
Instead of using the Veterans Exemption, most non-disabled Veterans in the state will use the California Homeowners Exemption. This exemption lowers the taxable value of your home by $7,000. Since property tax is calculated as a percentage of your assessed home value, a lower taxable value means you pay less in property taxes each year. Available to Veterans and non-Veterans alike, this program will most likely be your best bet, unless you qualify for the Disabled Veterans Exemption.
You may be eligible for other types of tax exemptions based on your living situation. On top of state-wide exemption programs, there can be additional exemptions at the county level, such as those aimed at low-income homeowners and those who use their property for agricultural purposes. There are also exemptions for religious properties, tribal housing and even public works of art. You’ll want to speak with someone from your county assessor’s office to determine your eligibility for these special exemptions.
How to Apply for The California Disabled Veteran’s Property Tax Exemption
When it comes time to apply for the Veteran’s exemption for property tax in California , you’ll need to request the appropriate forms from your local county assessor. You can usually download these forms from the assessor’s website, fill them out and mail them in without needing to step foot into their office. To find out what your local assessor’s website is, find your county on this list and click on the assessor’s name. For example, Veterans in San Diego County can find out more information about property tax exemptions on this local government page.
Keep in mind that only Veterans with “other than dishonorable” discharges are eligible for the Veterans and Disabled Veterans Exemptions. If you’ve received a disability rating of 100% from the VA, your local assessor will not need any additional evidence of your disability, such as medical forms or proof of service. You can only have one property tax exemption at a time, so choose the one that is most advantageous to you.
In many cases, new homeowners will find an application for the Homeowners Exemption in their mailbox not long after moving in. County assessors send these out as courtesy whenever there is a purchase or transfer of real estate because they know that the Homeowners Exemption is appropriate for most residential properties. Per California law, a property owner can only claim one Homeowners Exemption, even if they own multiple properties.
If You You Are Considering Buying a Home and Taking Advantage of
Buying a Home & Applying the Disabled Veteran’s Property Tax Exemption
There are a number of key point to focus on when preparing to buy a home using your VA loan benefits, especially in the coastal states with higher home prices.
First things first! Obtain your Certificate of Eligibility! If you don’t have the proper VA Loan entitlement, your journey to home ownership will quickly fall short!
Also, you’ll need to demonstrate sufficient income to meet VA loan qualifications, and your credit score for a VA loan must be acceptable. In some cases, we can fund loans with scores as low as 550 or without any credit score at all.
Your debt to income ratios are very important. Fortunately, they are very flexible when reviewed by VA loan underwriters.
Once you have your COE and have some confidence regarding your credit and debt ratios, the next step is to get a VA Loan Preapproval from a skilled VA loan professional.
Thankfully, there is no PMI with a VA loan, unlike FHA loans which thus have higher payments.
When coordinating your VA lender and your real estate agent, it’s a good idea to get them both on the same page with your VA offer. Occasionally, it can make sense for the real estate agent to ask for the Seller to pay for the VA Non-Allowable Fees.
As you shop for homes, it is important to understand what your property tax liability (tax rate) will be on your new home. This is an essential component for budgeting and understanding affordability. In newer communities that need infrastructure such as roads and schools, especially in Southern California, your property taxes with Mello Roos Bonds can more than double your property tax payments.
Once you’re in your home, the home improvement solicitations will start coming! We suggest that you be VERY cautious (eyes WIDE open), when considering a “Hero Loan” to finance home improvements. They are not labeled Hero Loans to attract Veterans…and if they were…that would be another reason to say “No Thank You!”
You’ll need to talk to one of our Sr. VA Loan Professionals. Call 949-268-7742 today!
Your Resource for Veteran Homeownership
At SoCal VA Homes, we’re committed to helping Veterans reach their homeownership goals.
This is why we provide information on how to make the most out of your military benefits at every step of the way.
Your property tax exemptions can make owning a home much more affordable, so find out if you meet the VA loan requirements to to take the next important step.
Our team of Veterans helping Veterans is at-the-ready to assist you throughout the home buying process, so call 949-268-7742 to speak with a VA loan expert today!