In March 2008, the California State Board of Equalization published Publication 149 – Property Tax Welfare Exemption.  Here is an excerpt from the Introduction:

The California Legislature has the authority to exempt property (1) used exclusively for religious, hospital, or charitable purposes, and (2) owned or held in trust by nonprofit organizations operating for those purposes.  This exemption is known as the Welfare Exemption ….  When the Legislature enacted section 214 of the Revenue and Taxation Code to implement the Constitutional provision, a fourth purpose – scientific – was added to the three mentioned in the Constitution.

The following information is intended as a guide for organizations that wish to file for a property tax exemption through the Welfare Exemption.

Before you dismiss reading the Publication, note the following:

  • 501(c)(3) status does not automatically make an organization exempt from property taxes.
  • Not every 501(c)(3) organization will qualify for the Welfare Exemption.
  • New organizations must have certain "magic language" in their governing documents in order to qualify for the Welfare Exemption (see Exhibit C: Irrevocable Dedication and Dissolution Clauses).
  • An organization seeking exemption for the first time must file a claim for an Organizational Clearance Certificate and, where applicable, a Supplemental Clearance Certificate for Limited Partnership, Low-Income Housing Property – Welfare Exemption, with the Board.
  • Claims for the Welfare Exemption must also be filed annually with the county assessor in which the organization’s property is located or being used.

Comments

  1. love83 says:

    so i received a letter from my landlord/ tha 1st letter i’ve ever received from a landlord/ requesting me to verify my family size and income regarding this type of exemption. at 1st i thought they would be figuring my income to see if i would have to pay into any property tax/but i guess i was reading it wrong. I am correct in believing that a renter is not liable for any property tax right??

  2. Gene Takagi says:

    The welfare exemption discussed would not apply to individuals. Is your landlord a nonprofit organization operating exclusively for a qualifying purpose?

  3. does this apply to religious schools as well ?

  4. Gene Takagi says:

    Fadi, if the school is in California, please read Publication 149 for all the permutations of how the exemptions may apply.

  5. Noel says:

    our school district leased out a portion of one of its campuses to a California non-profit corporation.
    They plan to use the facility to conduct preschool programs for about 100 children from low-inome families. The program includes feeding, care, and other activities to prepare the children for kindergarten. The lessee does not charge fees from the families but is funded by the CA Dept of Education in conjunction w the school district.
    is the lessee or the school district liable to pay property taxes for the leased area? The lessee pays the school district $1 per year.
    thanks in advance.