Exemptions From Property Taxes
Even though the California Constitution states that “all property is taxable,” over the years a number of exemptions from property tax have been approved by the legislature or the voters. Reasons for these exemptions may have been to recognize private activities that replace demands on public services [welfare / private colleges]; church and religious activities that should be separated from state intrusion [religious / church]; promotion of homeownership [homeowner]; recognition of service to state and country [veteran] and difficulty of administering assessment of stocks, bonds, bank accounts and inventory [intangible / inventory]. In addition, counties are allowed to adopt low-value ordinances which allow assessments below a certain level (in Napa County $2,000) to be exempted because the cost of billing and collecting the tax is less than the revenue.
Probably the best known exemption is the homeowner’s exemption which reduces the value of an owner-occupied residence by $7,000 in value or approximately $71 in annual property taxes. In Napa County the homeowner’s exemption accounts for approximately $162.6 million of assessed value reduction to our almost $27 billion assessment roll. The $1.62 million in reduced property tax revenue caused by the homeowner exemption is reimbursed to local agencies by the State of California from general fund revenues.
Welfare & Religious
Welfare and religious exemptions cover all churches, entities such as Queen of the Valley Hospital, Pacific Union College, the Salvation Army, Napa County Land Trust, some pre-schools and many others. The combined reduction in the assessment roll from all exemptions other than homeowners is $754.5 million. This $7.54 million revenue reduction is not reimbursed by the State of California.
Disabled veterans and their widows/ers can qualify for the disabled veteran exemption which is either $127,510 or $191,266 value reduction depending on the income of the claimant for 2016. The income limit for the higher exemption will be $57,258. To qualify for the disabled exemption, the veteran must be 100% disabled from service related injuries or illness or, if less than 100%, rated by the Veterans Administration as unemployable. If the veteran died from those injuries or illness, the unmarried widow/er is eligible to claim the exemption during her/his lifetime.
All exemptions except the low-value exemption require a claim for exemption. For homeowners and disabled veterans at the $127,510 level, only an initial claim is required and the exemption remains in effect for as long as they remain eligible. Most other exemptions require an annual filing to insure that eligibility is current.