A property tax exemption excuses all or a portion of the assessment because the assessee has met certain criteria allowed by the State Constitution. Tax exemptions may be granted for properties used by homeowners, veterans, disabled veterans, veteran’s organization or non-profit organizations. A property cannot receive more than one type of exemption. The county is reimbursed by the state for property tax revenue lost by the homeowner's exemption, but not for other types of exemptions.
The Board of Equalization's website (www.boe.ca.gov) now includes nonprofit virtual seminars. The virtual seminars include a video presentation and a PowerPoint presentation providing information on nonprofit, faith-based, welfare and veterans' organizations. The seminars may be accessed below.
This exemption applies to properties used exclusively for religious, hospital, scientific or charitable purposes. The property must be owned or held in trust by a non-profit organization that holds an Organization Clearance Certificate issued by the State Board of Equalization.Qualifying purposes and property use include:
A claim form must be properly completed and filed annually by February 15th with the Assessor. Claims filed February 16 - December 31 will receive a partial exemption for that year.
A qualifying organization’s property may be exempted fully or partially from property tax, depending on how much of the property is used for a qualifying purpose and activity. It is the Assessor’s duty to determine whether the use of the property qualifies for the welfare exemption. When making this determination, the assessor considers whether the actual operation of the property (use of the property) is consistent with the purpose identified on the Organizational Clearance Certificate. You may contact the State Board of Equalization's website or telephone (916) 445-3524 to apply for an Organization Clearance Certificate.
Other Categories of Exemptions
Aircraft of Historical Significance
Free Public Library
Unless stated otherwise below, a claim form must be properly completed and filed annually by February 15th with the Assessor. Claims filed February 16 - December 31 will receive a partial exemption for that year.
An organization may, subject to a late-filing penalty, file a claim for the Welfare Exemption without limitation. However, the law limits refunds of taxes paid to four years from the date the payment was made. Thus, if an organization were to qualify for the Welfare Exemption in December of 2012 for years 2006 through 2012, had paid taxes on its real property timely for all those years, and filed claims for refund of taxes paid, it could expect a refund of taxes paid for the first installment due November 1, 2000, for both installments due in 2009, 2010, and 2011, and possibly for the first installment due November 1, 2008. No refund would be possible for taxes paid timely for 2007 or 2006, since these years were beyond the four-year statute of limitations (section 5097(a)(2), Revenue and Taxation Code).
Claims for Welfare Exemption must be filed annually with the assessor in the county in which the organization's property is located, or, in the case of personal property, being used. The annual filing claim forms are mailed to established claimants by the assessor's office. Claim forms for first time filing (BOE Form 267) and annual filings can be downloaded from the assessor's website. The assessor may not grant a claim unless the organization holds a valid Organizational Clearance Certificate issued by the Board. Please contact the Board of Equalization to request a Claim for Organizational Clearance Certificate if your organization does not have a valid Organizational Clearance Certificate.
The law recognizes mid-year acquisitions of real property by qualified organizations. If the property is put to an exempt use within 90 days of acquisition, it may be possible to have the Welfare Exemption applied to the current year's taxes. For property acquired between January 1 and June 30, full cancellation of taxes is possible for the ensuing fiscal year (beginning July 1). For property acquired between July 1 and December 31, prorated cancellation is available from the date of acquisition to the end of the fiscal year (June 30).
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:
If the claimant disagrees with the assessor's determination of ineligibility for the welfare exemption, the claimant 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, the organization may file a refund action in superior court.
In general, the organization must demonstrate that it is in receipt of substantial donations from outside sources. Those donations, in turn, must be passed on to a segment of the public that is sufficiently large that a gift to the organization may be viewed as benefiting the community as a whole.
Although an organization's receipt of donations is an important criteria by which is charitable purpose can be demonstrated, the absence of donations, by itself, will not result in a determination that a charitable purpose does not exist if it can be shown that the organization is providing a benefit or gift to the community (Stockton Civic Theatre v. Board of Supervisors (1967) 66 Cal.2d. 20).
In addition, the organization must meet ALL of the following criteria:
Claims are filed on the following forms:
Supplemental affidavits are also required for certain property types:
Organizations currently eligible for the welfare exemption (eligible prior to January 1, 2004) will automatically receive an Organizational Clearance Certificate from the Board in December 2003.
Organizations that intend to claim the welfare 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).
Additional information that should be included with the claim (as indicated on the claim form) include the following organizational documents:
The Legislature has the authority to exempt property (1) used exclusively for religious, hospital, scientific, 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.
Claims 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 Welfare Exemption is jointly administered by the Board of Equalization (Board) and the county assessor. Effective with claims filed on or after January 1, 2004, the Board determines whether the organization is eligible to receive the welfare exemption and the county assessor determines whether the use of the property is eligible for the exemption. If the Board determines that an organization is eligible, the Board 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. 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 Board staff; but, the assessor may not grant a claim unless the organization holds a valid Organizational Clearance Certificate issued by the Board. 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 Board.
In general, the welfare exemption from local property taxes 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.