Institutional Exemption

The institutional 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:

  • Property used exclusively for religious, hospital, scientific or charitable purposes
  • Property used exclusively for schools of less than collegiate level
  • Property used exclusively for nursery school purposes
  • Property used exclusively for noncommercial educational FM stations or educational TV station
  • Property used exclusively for housing and related facilities for low/moderate income elderly or handicapped families, and is financed by HUD
  • Property used exclusively for rental housing for lower income households
  • Property used exclusively for emergency or temporary shelter for homeless people
  • Property used exclusively for housing and related facilities for employees of religious, hospital, scientific or charitable organizations if the use is necessary for the operation of the organization
  • Charitable purposes include educational purposes, which mean those purposes and activities for the benefit of the community as a whole
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) 274-3350 to apply for an Organization Clearance Certificate.

The Board of Equalization's website 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.

Frequently Asked Questions

My charitable organization recently purchased real property. Can we have our taxes canceled now?

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).