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Property Tax Exemption Actually Exempts All Or Part Of The Property Tax Owed. An Exclusion Prevents A Reappraisal Of The Property, But Does Not Exempt the Property From Any Property Taxes.
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The Legislature has the authority to exempt property (1) used exclusively for religious, hospital, or charitable purposes, and (2) owned or held in trust by nonprofit organizations operating for those purposes. This exemption is popularly known as the welfare exemption and was first adopted by voters as a constitutional amendment on November 7, 1944. When the Legislature enacted section 214 of the Revenue and Taxation Code to implement the Constitutional provision in 1945, a fourth purpose scientific, was added to the three mentioned in the Constitution. In general, the welfare exemption from local property tax is available to property of organizations formed and operated exclusively for qualifying purposes (religious, scientific, hospital or charitable), which use their property exclusively for those purposes. Both the organizational and property use requirements must be met for the exemption to be granted. The Welfare and Veterans' Organization Exemptions are jointly administered by the Board of Equalization (BOE) and the county assessor. The BOE determines whether the organization is eligible to receive the welfare or veterans' organization exemption and the county assessor determines whether the use of the property is eligible for the exemption. If the BOE determines that an organization is eligible, the BOE issues an Organizational Clearance Certificate for the claimant to provide with exemption claim forms filed in any of the 58 counties. The county assessor reviews claims for the welfare exemption, and the assessor's determination of whether an organization's property use satisfies the requirements of section 214 will be made by the county assessor without review by the BOE staff. However, the assessor may not grant a claim unless the organization holds a valid Organizational Clearance Certificate issued by the BOE. The assessor may deny an exemption claim, based on non-qualifying use of the property, notwithstanding the claimant's organizational clearance certificate granted by the BOE.
A county assessor may not grant a claim for the welfare exemption unless the organization holds a valid Organizational Clearance Certificate issued by the BOE. Claim form BOE-277, Claim for Organizational Clearance Certificate-Welfare Exemption, and claim form BOE-279, Claim for Organizational Clearance Certificate-Veterans' Organization Exemption, are available on the BOE's website. You may also request a copy of a claim form by contacting the BOE's Property Tax Exemption Section at 1-916-274-3430.
Claims to obtain an Organizational Clearance Certificate may be filed with the BOE at any time throughout the year. Claims for the welfare exemption must be filed annually with the county assessor, generally by February 15. If a claim is filed after February 15, a partial exemption may still be granted. The assessor may not grant a claim unless the organization holds a valid Organizational Clearance Certificate issued by the BOE. The law recognizes mid-year acquisitions of real property by qualified organizations. The property will be eligible for exemption from the supplemental assessment if the organization claiming the exemption is a qualified organization and meets the qualifications for the exemption no later than 180 days after the date of the change in ownership or the completion of new construction. A claim for exemption from supplemental assessment must be made on or before the 30th day following the notice of supplemental assessment sent by the county assessor. If a claim is filed after the 30-day period, a partial exemption is available.
Claims are filed on the following forms: BOE-267: Claim for Welfare Exemption (First Filing), (claim form for initial request of welfare exemption for a specific property when the claimant is a new filing in the county or requesting exemption for a new location in the county) BOE-267-A: Claim for Welfare Exemption (Annual Filing), (claim form filed on an annual basis after initial "been met" finding. May be filed on properties that were granted exemption in the prior year) BOE-269-AH: Claim for Veterans' Organization Exemption, (claim form filed for request for Veterans' Organization Exemption) Supplemental affidavits are also required for certain property types: BOE-267-H: Welfare Exemption Supplemental Affidavit, Housing-Elderly or Handicapped Families, (claim form filed for properties used for housing for elderly or handicapped families) BOE-267-L: Welfare Exemption Supplemental Affidavit, Housing-Lower-Income Households, (claim form filed for properties used for low income households) BOE-267-L1: Welfare Exemption Supplemental Affidavit, Low-Income Housing Property of (Limited Partnership), (claim form filed for properties used for low income households owned by limited partnerships) BOE-267-R: Welfare Exemption Supplemental Affidavit, Rehabilitation-Living Quarters, (claim form filed for properties used for rehabilitation and associated living quarters)
Organizations that intend to claim the welfare or veterans' organization exemption and are not currently eligible for these exemptions in any county in the state (i.e., new to state) must file a claim form requesting the certificate (BOE-277, Claim for Organizational Clearance Certificate-Welfare Exemption, or BOE-279, Claim for Organizational Clearance Certificate-Veterans' Organization Exemption). Additional information that should be included with the claim (as indicated on the claim form) include the following organizational documents: Articles of incorporation and amendments (or equivalent formative document) Tax exemption letter Financial statements of organization Documentation supporting/describing the activities of the organization Other information (as requested from Board staff)
No. The income tax exemption does not automatically confer property tax exemption to a nonprofit organization. Both ownership and use of the property drive the Welfare Exemption. Mere ownership of property by a nonprofit corporation does not satisfy the requirements for property tax exemption. The property must also be used exclusively for an exempt (religious, scientific, hospital, or charitable) purpose and activity. Certain uses of property will not qualify for exemption even though conducted by the nonprofit owner: Fundraising Unrelated business Allowing other unqualified individuals or organizations to use the property for private benefit
If you disagree with the assessor's determination of ineligibility for the welfare or veterans' organization exemption, you may seek a refund of property taxes paid by filing a claim for refund with the county board of supervisors. If the refund claim is denied, you may file a refund action in superior court.
The Church Exemption may be claimed on property that is owned, leased, or rented by a religious organization and used exclusively for religious worship services. (See Revenue and Taxation Code section 206.) The Church Exemption is the most restrictive of the three exemptions available to a church since the organization's property must be used solely for religious worship and other activities reasonably necessary for the accomplishment of the church's religious purposes. To apply for the Church Exemption, a claim form must be filed each year with the assessor of the county where the property is located. If a church owns and uses property and also allows another church to use that property, both churches must file Church Exemption claim forms. In the case of leased property, The church or religious organization leasing the property (lessee) may file a Church Exemption claim form, or The owner/lessor may file a Lessor's Exemption Claim form and have the user/lessee church complete the affidavit stating that the user/lessee church uses the property only for religious worship. The appropriate forms are available from the county assessor. They are BOE-262-AH, Church Exemption, and BOE-263, Lessor's Exemption Claim (if the property is leased). To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15. For example, to receive the exemption for fiscal year 2007-08, which runs from July 1, 2007, through June 30, 2008, the claim must be filed by February 15, 2007. The following links provide additional information on the Church Exemption.
The Religious Exemption may be claimed on property owned by a religious organization and used exclusively for religious purposes. (See Revenue and Taxation Code section 207.) This includes religious worship and school purposes, including preschools, nursery schools, kindergartens, schools of less than collegiate grade, or schools of collegiate grade and less than collegiate grade. The exemption is also available if another church uses the property part time for religious worship and operates a school, provided that the owner church continues to conduct worship services on the property. To apply for the Religious Exemption, the church must file claim form BOE-267-S, Religious Exemption, with the county assessor where the property is located. The form is available from the county assessor. To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15. For example, to receive the exemption for fiscal year 2007-08, which runs from July 1, 2007, through June 30, 2008, the claim must be filed by February 15, 2007. You only need to apply one time for the Religious Exemption. Once it is granted, the exemption remains in effect until it is terminated or the property is no longer eligible.
The Disabled Veterans' Exemption is available for qualified veterans to reduce their property tax liability. 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.
No. You may only receive either the Homeowners Exemption or Disabled Veterans. 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.
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.