2027’s California Disabled Veterans Property Tax Exemption: SB 296 Explained

In fall 2026, California’s Disabled Veterans property tax exemption saw its first major expansion in decades with the passing of California SB 296. This comprehensive guide breaks down who qualifies, how the 2027 exemption compares to existing exemptions, how much Disabled Veterans may be able to save, who else can benefit, and answers a host of frequently asked questions. 

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Before getting into California SB 296 and its changes, it helps to understand how the state’s existing Disabled Veterans’ exemption works.

Under the existing law, qualifying Disabled Veterans may receive one of two property tax exemptions on their principal residence: the basic exemption or the low-income exemption. Both reduce the home’s assessed value for property tax purposes, but the low-income exemption is only available to households whose income falls below an annually adjusted threshold.

For the 2026 property tax lien date, the basic exemption was $180,671. If your home had an assessed value of $700,000, for example, the exemption would reduce its taxable assessed value to $519,329. 

Under the average property tax rate (1.15%*), you would pay $5,972 annually, instead of $8,050 (additional fees may apply**). 

The low-income exemption provides a larger reduction for qualifying Veterans whose annual household income does not exceed a specified threshold. In 2026, the income limit was $81,131, and the exemption was $271,009. If your home had an assessed value of $700,000, the exemption would reduce its taxable assessed value to $428,991. 

At the same 1.15% tax rate, you would pay approximately $4,933 annually (again, additional fees may apply).

Note: The standard property tax rate in California is 1%; however, most or all Californians pay between 1.1% and 1.25% after local voter-approved bonds are factored in. Your rate may be higher or lower than the figure in the example above. 

**Note 2: Some property tax bills include direct assessments, special taxes, and other charges that may not be eliminated by the exemption. Homeowners should review their current property tax bill to see which direct assessments and other charges apply to their property.

Before applying for either version of California’s Disabled Veterans’ Property Tax Exemption, it’s important to understand who qualifies. Although SB 296 changes how much eligible homeowners can exempt from property taxes, it does not make the exemption available to every Veteran with a service-connected disability.

The state recognizes specific disability categories, and claimants must also meet requirements related to military service, property ownership, and residency.

Per the state Board of Equalization, California’s Disabled Veterans’ Property Tax Exemption is generally reserved for Veterans who meet at least one of three disability criteria:

• Blindness in both eyes: That is, a visual acuity of 5/200 or less, or a visual field that has contracted to 5 degrees or less.
• Loss of use of two or more limbs: This includes amputation or loss of function due to paralysis or other ailments.
• Total disability: A Veteran must be considered totally disabled due to an injury or disease incurred during military service. Either a VA 100% Disability Rating or compensation at the 100% level will satisfy this requirement.

Among other requirements, the law specifies that Veterans must have served in a qualifying branch of the U.S. Armed Forces***, been discharged under conditions other than dishonorable, and been determined eligible U.S. VA health and medical benefits.

***Note: An amendment ensuring U.S. Space Force Veterans who otherwise meet eligibility criteria can apply for the existing California Disabled Veterans’ Property Tax Exemption. SB 296 has this language baked into its original text. 

Beginning with the January 1, 2027 property tax lien date, SB 296 establishes a new exemption with two levels: a 50% exemption for qualifying households above the income threshold and a 100% exemption for those at or below it. A separate exception allows certain lower-value properties to remain eligible under the existing Disabled Veterans’ Property Tax Exemption. Critically, the $83,474 threshold is set to change annually.

Qualifying Veterans and unmarried surviving spouses whose household income exceeds $83,474 in 2027 may exempt 50% of the first $1 million (subject to annual adjustment) of their home’s assessed value from property taxes. 

If a qualifying Veteran’s principal residence has an assessed value of $700,000, the 50% exemption would remove $350,000 of that value from taxation, leaving an equal $350,000 subject to property tax. At a tax rate of 1.15% (this figure typically varies from 1.1% to 1.25%), the Veteran would owe approximately $4,025 in annual property taxes, before any applicable direct assessments or other charges.

Compared to 2026 lien taxes, SB 296 effectively saves Veterans applying for the standard exemption an additional $2,000 compared to the existing California Disabled Veterans Property Tax Exemption.

Those whose household income does not exceed the income threshold ($83,474 in 2027) may qualify for a 100% exemption on the first $1 million of assessed value. 

Using the same example of a home assessed at $700,000, the exemption would cover the entire assessed value. The homeowner would therefore owe no property taxes on the home’s assessed value. However, special assessments, parcel taxes, or other charges may still apply. The amount and applicability of these charges will vary by property and location.

SB 296 includes a limited exception for qualifying homeowners whose property’s assessed value falls below a separate threshold—$371,778 for 2027, subject to annual adjustment—and whose household income exceeds the applicable income limit ($83,474 in 2027). In this situation, the property remains subject to the existing (pre-2027) California Disabled Veterans’ Property Tax Exemption.

Eligible homeowners should consult their county assessor to confirm which rules apply to their circumstances and what documentation they need to submit.

Eligible homeowners should consult their county assessor to confirm which rules apply to their circumstances and what documentation they need to submit.

Per California’s Board of Equalization, an initial claim for the Disabled Veterans’ Exemption generally follows one of several qualifying events:

• A Veteran receives a qualifying disability determination: The VA or the Veteran’s military branch issues documentation showing a 100% disability rating OR compensation at the 100% rate due to unemployability.
• A Veteran dies from a service-connected injury or disease: This may establish eligibility for the Veteran’s unmarried surviving spouse, even if the Veteran did not qualify for the exemption during their lifetime.
• A qualifying claimant purchases a home: The claimant establishes residency at the property within 90 days of purchase.
• A qualifying Veteran moves into a property they already own: The property becomes eligible once the Veteran establishes it as their principal place of residence.

These events can affect when the exemption begins and how much property tax relief is available for the initial tax year. Veterans and surviving spouses should contact their county assessor immediately after a qualifying event to learn the applicable filing deadlines.

It depends. Even Disabled Veterans who qualify for the 100% exemption may still be responsible for special assessments and other local- or county-related fees. 

Additionally, the 100% exemption only applies to the first $1 million of a qualifying home's assessed value (subject to annual adjustment). Veterans whose homes have an assessed value exceeding that amount may still owe property taxes on the portion above the exemption limit. I.e., if a qualifying Veteran’s home is assessed at $1.5 million, they will pay taxes on $500,000 of that assessed value.

No, the applying Veteran will need to have their new property reassessed. That said, if the Veteran previously qualified for their original property, they should still qualify for the exemption for their new property provided there has been no other change to their eligibility.

A 70% or 80% VA disability rating alone does not qualify a Veteran for California’s Disabled Veterans’ Property Tax Exemption. 

However, a 100% rating is not the only way to qualify. Veterans who meet California’s statutory definitions of blindness in both eyes or loss of use of two or more limbs may also qualify. Additionally, a Veteran with a combined rating below 100% may qualify if the VA compensates them at the 100% rate through Total Disability based on Individual Unemployability (TDIU).

No. Under SB 296, claimants receiving the new exemption cannot combine it with another property tax exemption on the same residence. Eligible homeowners should compare the available exemptions with their county assessor to determine which option applies to their circumstances. 

California’s Board of Equalization offers technical explanations of all statewide taxes, while your county assessor’s office can break down the potential taxes you may pay on your home and other property. 

For Veterans-specific resources, American Legion Veterans Service Officers provide a wealth of knowledge and resources on various federal, state, and other programs that benefit Veterans. This includes everything from VA benefits help to early steps re VA home loans. 

In California, The American Legion also sponsors programs such as American Legion Gaming and The California Legionnaire, which covers Veterans news and compiles information on California Veterans resources.