Disabled Veterans' Exemption

The Disabled Veterans' Exemption is available to a qualified veteran who:

• Is blind in both eyes. Being blind in both eyes means having a visual acuity of 5/200 or less, or concentric contraction of the visual field to 5 degrees or less.
• Has lost the use of two or more limbs. Losing the use of a limb means that the limb has been amputated or its use has been lost by reason of ankylosis, progressive muscular dystrophies, or paralysis.
• Was totally disabled as a result of injury or disease incurred in military service. Being totally disabled means that the United States Department of Veterans Affairs (USDVA) or the veteran's military branch has rated the disability at 100 percent or has rated the disability compensation at 100 percent by reason of being unable to secure or follow a substantially gainful occupation. If a veteran has received a disability rating of 100 percent from the USDVA, the county assessor should consider the veteran qualified for the exemption without requiring further documentation of disability, such as medical files.

The Disabled Veterans' Exemption is also available to an unmarried surviving spouse of a deceased veteran who:

• Qualified for the exemption during their lifetime; or
• Would have qualified for the exemption is they had been alive on January 1, 1977; or
• Died from a service-connected injury or disease.

In the case of an unmarried surviving spouse of a veteran who died from a service-connected injury or disease, the unmarried surviving spouse may be eligible for the exemption even though the veteran was not eligible for the exemption during their lifetime.

If the unmarried surviving spouse receives documentation from the USDVA showing that the veteran died of a service-connected injury or disease, the county assessor should consider the unmarried surviving spouse qualified for the exemption without requiring further documentation regarding the cause of death.

In order for property to qualify for the Disabled Veterans' Exemption, the property must be used as the claimant's principal place of residence. The property may be owned by the veteran, the veteran's spouse, or the veteran and spouse jointly. If two or more qualified claimants own a property in which they both reside, each claimant is entitled to the Disabled Veterans' Exemption to the extent of his or her interest in the property.

The one exception to the requirement that the property be the claimant's principal place of residence is when the claimant is confined to a hospital or other care facility, and the property would be the claimant's principal place of residence were it not for their confinement, provided that the property is not rented or leased to another party.

For property tax purposes, the definition of a principal place of residence closely parallels the legal doctrine of domicile. Under this doctrine, a person's domicile depends on two factors: physical presence and intention. The combination of both factors will be used by the county assessor to make the final determination of a claimant's primary residence.

Physical presence may be considered to have been established at the place where:

• A person is physically present and makes their home.
• A person customarily returns after work, and between trips or absences due to work, pleasure, or otherwise, even if the absence is extended.
• A person's clothes and personal belongings are kept.
• A person's housekeeping tasks (meal preparation, sleeping, bathing, entertaining) are performed.
• A person files income tax returns as a resident.
• A person's driver's licensed is issued.
• A person is registered to vote.

When considering whether or not physical presence has been established, the assessor should consider these elements as a whole. It is not required that all of these elements apply in order for physical presence to be established.

A claimant's intention to remain at the dwelling, rather than an intention to stay there only temporarily before returning to a legal domicile elsewhere must also be considered. A claimant's intention to occupy the dwelling as their principal place of residence is essential and required in order for the property to qualify as their principal place of residence for the purposes of the Disabled Veterans' Exemption.

The following LTAs pertain to issues involving the Disabled Veterans' Exemption:

• A disabled veteran receives a rating letter from the USDVA indicating a 100 percent disability rating or that the disability compensation is at the 100 percent level, thereby qualifying an existing principal place of residence for the exemption.
• A veteran, who may or may not have been qualified for the exemption during their lifetime, dies as a result of a service-connected injury or disease, thereby qualifying the veteran's surviving spouse's principal place of residence for exemption.
• A property is purchased by a qualifying claimant, who establishes residency at the property within 90 days of purchase.
• A qualifying veteran establishes residency at a property already owned by the veteran.

Initial Filing Requirements

In order to receive 100 percent of the exemption for the first qualifying year, the claim form must be filed between the date of the eligibility event and on or before the following January 1, or 90 days after the date of the eligibility event, whichever is later. Claims filed after this period are eligible for 85 percent of the exemption for the initial qualifying year. If filing for the first time for multiple prior years, 85 or 90 percent of the eligible exemption may be granted, depending upon the claimant's filing date. The exemption is prorated as of the date of qualification to the remainder of the fiscal year.

Annual Filing Requirements

Basic Exemption: There is no annual filing requirement for the basic Disabled Veterans' Exemption. After the basic exemption has been granted, the claimant will continue to receive the basic exemption on the property until the claimant, or the property, no longer qualifies. The assessor must be notified if there has been a change in eligibility for the exemption.

Low-Income Exemption: The low-income Disabled Veterans' Exemption requires annual filing to ensure that the claimant continues to meet the annual household income limit restriction. The claim form must be filed annually between January 1 and on or before February 15.

Annual claims filed after February 15, but on or before December 10 of the same year, are eligible for 90 percent of the eligible exemption for that year and claims filed after December 10 are eligible for 85 percent of the eligible exemption.

BOE-261-GNT, Disabled Veterans' Exemption Change of Eligibility or Termination Notice, should be used to notify the Assessor when the claimant no longer qualifies for the exemption. Prior to the annual January 1 lien date, the assessor must annually mail this form to all taxpayers who received the Disabled Veterans' Exemption in the preceding year.

This is for information only. Please contact your local county assessor's office for a copy of the applicable form.

Documentation

All claimants must attach the following documentation to the initial claim for the exemption:

• Proof of the veteran's disability. In most cases, this will be a letter from the USDVA.
• Proof that the character of service was under "other than dishonorable" conditions, such as a DD-214, or other letter from the USDVA indicating the character of service.

Unmarried surviving spouses must also attach additional documents, depending on whether or not the veteran qualified for the exemption during the veteran's lifetime.

If the veteran qualified for the exemption during the veteran's lifetime, the unmarried surviving spouse must also attach:

• A copy of the marriage certificate.
• A copy of the death certificate.

If the veteran did not qualify for the exemption during the veteran's lifetime, the unmarried surviving spouse must also attach:

• A copy of the marriage certificate.
• A copy of the death certificate or report of casualty.
• Proof that the death was service-connected.
• Dates of the veteran's service.

1. What is the definition of "totally disabled"?
   
   For purposes of the Disabled Veterans' Exemption, totally disabled means that the United States Department of Veterans Affairs (USDVA) or the military service from which the veteran was discharged has either:

   • Rated a veteran's disability at 100 percent, or
   • Rated the disability compensation at 100 percent because the veteran is unable to secure or follow a substantially gainful occupation.
2. I am a veteran with an 80 percent disability rating. Would I be allowed 80 percent of the Disabled Veterans' Exemption?
   
   No. A disability rating of 100 percent is required to be eligible for the exemption. Unfortunately, there are no partial allowances for a rating less than 100 percent.
3. My husband and I owned and lived in our home which received the Homeowners' Exemption prior to his deployment overseas. He was severely injured and will not be able to return home; instead he needs to be confined to a care facility. Are we allowed the Disabled Veterans' Exemption on our home even though my husband did not qualify at the time he was living there and may never return to live there?
   
   Yes, your home would qualify for the exemption. Revenue and Taxation Code section 205.5, subdivisions (b)(2) and (c)(3) allow the exemption to continue on property that would have been a claimant's principal place of a residence were it not for the fact the claimant was confined to a hospital or other care facility, provided the home is not rented out to a third party.
4. I purchased a vacant parcel where I plan to have my home built. Can I apply the Disabled Veterans' Exemption on the land now?
   
   No. The exemption is only permitted for a principal place of residence. However, if you place a manufactured home on the land where you will live while your home is being built, then the property could qualify for the Disabled Veterans' Exemption. The exemption would first apply to the improvement, then to the land. If the manufactured home is subject to the vehicle license fee, the exemption is applied to the land only.
5. I currently have the Disabled Veterans' Exemption on my house. If I move in with my parents, can I still receive the exemption if I rent out my house? If not, can the exemption apply to my parents' house, since I am now living there?
   
   The Disabled Veterans' Exemption is allowed only on an owner-occupied residence, unless you have been confined to a hospital or other care facility. If you choose to move out of your home, the exemption no longer applies. Your parents' home would be eligible for the exemption only if you were also on the title as one of the owners.

6. I could have received the Disabled Veterans' Exemption as of last year but the USDVA has not finished processing my disability rating certification. It's been over a year since I applied for the rating. Are there any retroactive provisions for the exemption once I get my rating?
   
   Yes. Revenue and Taxation Code section 276.1 provides that a retroactive period for the exemption starts from the effective date of your disability rating. If you are unable to timely file for the exemption due to a "delayed" disability rating, the full amount of the Disabled Veterans' Exemption may be granted for previous years. Once you file the appropriate claims and the exemption is granted, any taxes on your property's assessed value that would have been exempt had you filed the claim timely, will be cancelled or refunded, including any interest and penalties, subject to an eight-year statute of limitation as provided by Revenue and Taxation Code section 5097(a)(4). To receive 100 percent of the eligible exemption, you must file the claim with the county assessor within 90 days after you receive the disability rating, or on or before the next lien date, whichever occurs later.
7. I filed for a disability rating with the USDVA in May 2016, and finally in October 2017 I received a 100 percent rating effective as of March 1, 2016. I filed a timely claim for the basic Disabled Veterans' Exemption on my condo that was assessed for $220,000 in 2015. What exemption am I entitled to receive?
   
   Your exemption falls under the provisions of section 276.1, delayed disability rating. You are entitled to receive the full amount of the exemption as of the effective date of your disability rating, March 1, 2016. Your property tax reduction will be prorated from the date the property became eligible for the exemption.
   
   Your 2015-2016 prorated exemption and taxes would be calculated as follows:
   
   $126,380 2015 basic exemption amount / 365 days = $346.25 exemption/day
   
   $346.25 exemption/day × 122 days eligible (March 1 – June 30, 2016) = $42,243 prorated exemption
   
   You will receive the full amount of the exemption for all years thereafter, until you or the property no longer qualifies for the exemption.
   
   Note: The 2015 exemption amount is used in the above example as it applies for the 2015-2016 fiscal year (July 1, 2015 – June 30, 2016).

8. Will I still be entitled to the Disabled Veterans' Exemption if my wife and I created a revocable trust where our children hold title to the property as trustees and we are the beneficiaries?
   
   Provided that you still meet all the other requirements for the exemption, you would still be entitled to the exemption. The trustee takes only bare legal title to the trust property and does not become an owner in the normal sense, whereas you and your wife as the beneficiaries have an equitable estate in the trust property.
9. Is the exemption allowed if title to the residence is not in the name of the disabled veteran but is in the name of their spouse?
   
   Yes, the disabled veteran may receive the exemption even if the property is owned by the veteran's spouse as separate property, as long as it is the veteran's principle place of residence.
10. Is my registered domestic partner regarded as my spouse for the Disabled Veterans' Exemption?
    
    For the Disabled Veterans' Exemption, your domestic partner is not considered a spouse.
11. A roommate and I purchased a home in which we each own a 50 percent interest. As a qualified disabled veteran, am I entitled to only 50 percent of the basic Disabled Veterans' Exemption or am I allowed the entire exemption as to my half? Is my co-owner allowed the Homeowners' Exemption on her 50 percent interest?
    
    You are entitled to up to the full amount of the basic or low-income exemption regardless of the percentage interest you hold in the property. The exemption is not reduced by 50 percent because you only have 50 percent interest in the property. However, the exemption amount may not exceed your share of the value of the home. For example, using the unadjusted basic exemption amount of $100,000, if the purchase price was $180,000, your 50 percent interest would only provide you with a $90,000 exemption (the lesser of $100,000 or one-half of $180,000).
    
    Only one exemption per property is allowed. If you are granted the Disabled Veterans' Exemption, the Homeowners' Exemption is not available on the same property, even if a co-owner qualifies for it.

12. My husband contracted an infectious disease while in the service. He received a 30 percent disability rating from the USDVA, which did not provide eligibility for the Disabled Veterans' Exemption. He recently died as a result of the disease. Am I now eligible for the exemption?
    
    Yes. Revenue and Taxation Code section 205.5, subdivision (c)(1)(B), provides that if you are the unmarried surviving spouse of a veteran who died from a service-connected injury or disease, you are eligible for the exemption, even though your spouse did not qualify during his or her lifetime. You must provide a letter to your county assessor from the USDVA certifying that your spouse's cause of death was a service-connected injury or disease.
13. I have been receiving the Disabled Veterans' Exemption as an unmarried surviving spouse for many years. Since I will be 58 next year, may I remarry and still receive the exemption?
    
    No. Although there are some federal laws that allow a surviving spouse to continue receiving federal benefits if they remarry after the age of 57, in California, once you remarry, regardless of age, you will no longer qualify for the Disabled Veterans' Exemption.
14. I received the Disabled Veterans' Exemption after my first husband's death. Because I later remarried, I lost the benefits of the exemption. I am now divorced from my second husband. Am I allowed the exemption again?
    
    Yes. Upon divorce or death of a new spouse, the once qualified surviving spouse of a qualified veteran may again receive the Disabled Veterans' Exemption.

15. I am an unmarried surviving spouse of a deceased veteran with two children. In determining whether or not I qualify for the low-income Disabled Veterans' Exemption, do I include the amount of veterans' benefits paid to me and my children in the calculation of household income? Do I include social security payments?
    
    Yes, all veteran's benefits and social security benefits are included in the determination of your household income. The dependency and indemnity compensation (DIC) benefits paid to you for each dependent minor child are included in household income. Even though the increased benefit payments are a result of the existence of such a child, they are benefits to which the surviving spouse is entitled to receive; they are not the dependent child's separate benefit. However, any income received by the minor himself or herself should not be included in the calculation of household income. Please see the instructions to the exemption claim form, BOE-261-G, Claim for Disabled Veterans' Property Tax Exemption, to determine what constitutes "household income" in qualifying for the low-income Disabled Veterans' Exemption.
16. I have been granted the Disabled Veterans' Exemption for the past few years. Recently, I realized that I could have qualified for the low-income exemption instead. Can I be granted the difference between the exemption amounts from prior years now?
    
    Yes, you are entitled to an increased exemption based on the difference between the two exemption amounts. You must file a new claim form for each prior year for which you are claiming the low-income exemption and follow the instructions on the second page of the form under "Statements."

17. Does the Disabled Veterans' Exemption apply to supplemental assessments?
    
    Yes. However, the amount of the exemption, will be reduced by any existing exemption that may currently exist on the property and the exempt amount applied will not exceed the amount of the supplemental assessment. Any exemption amount in excess of the supplemental assessment may be applied to the regular roll.
18. I purchased a home in February 2017 and received two supplemental bills. Am I allowed the Disabled Veterans' Exemption on both supplemental assessments?
    
    Yes. The Disabled Veterans' Exemption may be applied toward any positive supplemental assessments, either on a new purchase or new construction, provided that the property has not already exhausted the eligible amount of the exemption. If the property is received another exemption (for example, the Homeowners' Exemption) and a claim for the Disabled Veterans' Exemption is subsequently filed, then the difference in the amount between the two exemptions may be applied to the supplemental assessment.
19. I purchased a home in September and filed for the low-income Disabled Veterans' Exemption on the following January 6. Because I filed late, the county assessor granted 85 percent of the exemption on the regular tax bill. I later received a supplemental assessment notice in April for $210,000. Since I already filed for the exemption in January, will I be allowed the remaining 15 percent of the exemption on the supplemental tax bill?
    
    Yes. Since you received 85 percent of the exemption on your regular bill and your supplemental bill was received after you filed for the exemption, you are considered to have timely filed with respect to your supplemental bill. The remaining 15 percent of the exemption will be applied to your supplemental bill.
20. I am a first-time claimant for the Disabled Veterans' Exemption on a $200,000 home that I purchased in October. Previously, the assessed value of the home was $160,000; therefore I received a supplemental assessment for $40,000. The exemption negated the supplemental assessment, but since I did not use the entire exemption, can the excess be applied to the prorated property taxes I had to pay in escrow for the regular assessment?
    
    Yes. The unused portion of your exemption may be applied to the regular assessment. You must file with the county to receive a refund of taxes already paid.

21. I recently became eligible for the Disabled Veterans' Exemption due to a service- connected injury. Where can I get the proper form to file for the exemption?
    
    The claim form, BOE-261-G, Claim for Disabled Veterans' Property Tax Exemption, must be obtained from your local county assessor's office and may be available on their website. You may find your assessor's contact information by visiting the Listing of County Assessors page.
    
    You must include the following with your claim form:
    
    

    • Your letter from the USDVA (or from the military service which discharged you), certifying that you have a service-connected disability rating of 100 percent or are compensated at the 100 percent rate due to individual unemployability; and
    • Proof that the character of your service was under a condition that is other than dishonorable (i.e., honorable, general (under honorable condition), other than honorable, or bad conduct).
22. What is the filing period for the Disabled Veterans' Exemption?
    
    To receive 100 percent of the basic or low-income exemption as of the date the claimant or the property qualifies, the initial claim must be filed within 90 days of the date of the qualifying event (see below) or by the January 1 following the date of the qualifying event, whichever is later.
    
    The qualifying event date is the latest of:
    

    • The purchase date of the qualified claimant's principal place of residence, provided residency is established within 90 days of purchase.
    • The date of the qualified claimant's USDVA notice of a 100 percent rating.
    • The date of the USDVA notice to the surviving spouse that the veteran's death was due to a service-connected injury or disease.
    • The date of the USDVA notice to the surviving spouse that the veteran's death was due to a service-connected injury or disease.

    For the low-income exemption only, a claim must be filed with the county assessor each year. Following the initial claim, subsequent annual filing periods are as follows:
    

    • Between January 1 and February 15 to receive 100 percent of the exemption.
    • Between February 16 and December 10 to receive 90 percent of the exemption.
    • Any time after December 10 of the current year to receive 85 percent of the exemption for that year.
23. Do I have to file for the Disabled Veterans' Exemption annually?
    
    For the basic Disabled Veterans' Exemption, you are not required to file for the exemption annually after you have filed your initial claim.
    
    For the low-income Disabled Veterans' Exemption, annual filing is required to certify that your yearly household income for the prior calendar year does not exceed the maximum allowable income for the ensuing fiscal year.
24. My brother and I purchased a rental property many years ago. I am a disabled veteran and now plan to occupy the rental property as my permanent home. When can I file a Disabled Veterans' Exemption claim form and when does the exemption go into effect?
    
    A property that was previously owned, but not occupied by the qualified claimant, may receive the exemption as of the date the property becomes the claimant's principal place of residence. To receive 100 percent of the exemption, you must file for the exemption within 90 days of the date the property became your principal place of residence or by the following January 1, whichever is later.
25. I purchased my home on February 2, 2016, and I filed for the Disabled Veterans' Exemption on September 8, 2016. To what extent would the exemption apply to me?
    
    If your disability rating was effective prior to your buying your home, the exemption amount will be prorated from the date the property became eligible for the exemption. If your disability rating became effective after the purchase, the exemption will be prorated as of the effective date of your disability. Since you filed for the exemption timely (before January 1 following the qualifying event date), the full prorated exemption amount is available to you.
26. I sold my home that was receiving the Disabled Veterans' Exemption and moved into another home that I purchased. Am I allowed the exemption on my new home right away or do I have to wait for the next lien date (January 1)?
    
    The effective date of the exemption on your new home is the date you move in and termination of the exemption on your previous home is as of the date it is no longer is your permanent place of residence. You must file BOE-261-GNT, Disabled Veterans' Exemption Change of Eligibility Report, with the county assessor of the county in which your old home was located to terminate the exemption on your old home and file BOE-261-G, Claim for Disabled Veterans' Property Tax Exemption, with the county assessor of the county in which your new home is located to claim the exemption on your new home.
27. I purchased a home in 2010 and lived in it until 2016, when I sold it and moved away. Now I have found out that, as a qualified disabled veteran, I could have qualified for the exemption while I lived in that home. Can I claim the exemption now to receive a refund of property taxes previously paid?
    
    If you and your previous property met all of the qualifications of the exemption, the Disabled Veterans' Exemption is available to you, even if you already sold the property and are no longer living there. Since you no longer own or live at the property, you must be able to demonstrate that you resided at the property during the periods for which you are seeking the exemption. As of January 1, 2015, the law allows refunds on property taxes paid by qualified disabled veterans for up to eight years after the date the taxes were paid.
28. I am currently receiving the low-income Disabled Veterans' Exemption on my home, which is assessed at $105,000. A friend built an enclosed patio and enlarged a bathroom for me. Do I need to file another claim form to claim the exemption on the addition?
    
    No. If you already have a claim on file for the property, you do not need to file again. The county assessor will assess the new construction and apply any unused exemption amount to your supplemental tax bill. If the assessed value of the new construction exceeds any excess exemption amount, you will be billed for the net supplemental taxes owed.

29. I have just been granted the Disabled Veterans' Exemption on my manufactured home, which is assessed at $58,000. Since I qualify for the basic exemption, will the excess be applied to the special assessments or direct levies on my tax bill?
    
    No. Exemptions are only applied to ad valorem property taxes (taxes based on the value of property). Direct levies, special taxes, and special assessments are not property taxes under the law, because they are not based upon the assessed value of the property. Most entities making such levies are completely independent, and while their revenues may be collected with your county's property tax bills, the county itself has no jurisdiction over most of those levies or the agencies issuing them.
30. How do I notify the county assessor that the property is no longer my principal place of residence or that I no longer qualify for the exemption?
    
    Annually, the county assessor will mail a notice, BOE 261-GNT, Disabled Veterans' Exemption Change of Eligibility Report, to all taxpayers who received the exemption in the preceding year. When applicable, the claimant should return this notice and provide the reason for the change in eligibility. If there is no change, the taxpayer may ignore the notice. Alternatively, the claimant or claimant’s representative may notify the assessor of the property's exemption ineligibility at any time. In any case, to avoid penalties, notification by June 30 is required when a property is ineligible for the exemption as of the preceding January 1 lien date.