Laws, Regulations & Annotations

W

880.0000 WELFARE EXEMPTION

(a) IN GENERAL

Annotation 880.0128.005

880.0128.005 Lease. A non-qualifying owner of real property cannot meet the ownership requirement of Revenue and Taxation Code section 214 by creating and using a synthetic lease. A "synthetic" or financing lease is a type of purchase agreement whereby the seller accepts periodic payments for the purchase price while retaining title to the property for security purposes. Even though under this type of lease the lessee may be considered the owner of the real property for change in ownership or income tax purposes, section 214 requires fee ownership of the real property by a qualifying organization for exemption purposes. If title to the real property is held by a for-profit organization and is leased to a qualifying organization, fee ownership of the property for exemption purposes is in the for-profit organization. Thus, the property is not eligible for exemption. C 5/30/2013.