Real property tax: Personal Income Tax Law: homeowners’ exemption: renter’s credit.

Senator Grove proposes substantial increases to California's homeowners' property tax exemption and renters' tax credit, targeting relief specifically for residents aged 62 and older. The legislation would raise the homeowners' exemption from $7,000 to $50,000 of a dwelling's full value beginning in fiscal year 2026-27, while simultaneously increasing the qualified renters' credit from $120 to $550 for joint filers and from $60 to $275 for individual filers.

The homeowners' exemption applies to primary residences only, excluding rental properties, vacation homes, and properties receiving veterans' exemptions. The bill maintains existing provisions for temporary absences due to natural disasters or medical care. For the enhanced renters' credit, eligibility continues to require California residency and occupation of rental property as a primary residence for at least half the tax year, with income limits of $50,000 for joint filers and $25,000 for individuals, adjusted annually for inflation.

While the bill creates new duties for local tax officials to implement these changes, it explicitly prohibits state reimbursement to local agencies for lost property tax revenues. The legislation would take effect immediately upon enactment as a tax levy, with both the increased exemption and credit becoming available in 2026.