Property taxation: disabled veterans’ exemption: household income.

Senator Seyarto's proposal to modify California's disabled veterans' property tax exemption would exclude service-connected disability payments from household income calculations through 2036. The change affects eligibility for an enhanced $150,000 exemption currently available to disabled veterans and surviving spouses with household incomes under $40,000.

Under existing law, property that serves as a disabled veteran's primary residence receives a basic exemption of $100,000 of assessed value, with a higher $150,000 exemption available to those meeting the income threshold. Both exemption amounts adjust annually for inflation. The law applies to veterans who are blind, have lost multiple limbs, or are rated 100% disabled due to service-connected injuries.

The bill requires the State Board of Equalization to track utilization data and submit a report to the Legislature by 2035 comparing annual claims between 2024 and 2033. This reporting requirement aims to measure whether excluding disability payments from income calculations achieves the stated goal of preventing qualification for disability benefits from disqualifying veterans from receiving the enhanced property tax exemption.

While the measure creates new administrative duties for local tax officials, it specifies that counties will not receive state reimbursement for implementing the changes or for any resulting reduction in property tax revenues. The provisions take effect immediately upon enactment and expire on January 1, 2036.