AB 476: Taxation: homeowners’ exemption and renters’ credit.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-03-25
Existing property tax law provides, pursuant to the authority of a specified provision of the California Constitution, for a homeowners exemption in the amount of $7,000 of the full value of a dwelling, as defined, and authorizes the Legislature to increase this exemption.
This bill, beginning with the lien date for the 201617 fiscal year, would increase the homeowners exemption from $7,000 to $25,000 of the full value of a dwelling. This bill would also require, for the 201718 fiscal year and for each fiscal year thereafter, the county assessor to adjust the amount of the homeowners exemption by the percentage change in the House Price Index for California for the first 3 quarters of the prior calendar year, as specified.
The California Constitution requires the Legislature, whenever it increases the homeowners property tax exemption, to provide a comparable increase in benefits to qualified renters. The Personal Income Tax Law authorizes various credits against the taxes imposed by that law, including a credit for qualified renters in the amount of $120 for married couples filing joint returns, heads of household, and surviving spouses if adjusted gross income is $50,000 or less, and in the amount of $60 for other individuals if adjusted gross income is $25,000 or less. Existing law requires the Franchise Tax Board to annually adjust for inflation these adjusted gross income amounts.
This bill would, for taxable years beginning on and after January 1, 2016, increase this credit for a qualified renter to $428 for married couples filing joint returns, heads of household, and surviving spouses if adjusted gross income is $50,000 or less, as adjusted for inflation, and to an amount equal to $214 for other individuals if adjusted gross income is $25,000 or less, as adjusted for inflation. The bill would also require, for taxable years beginning on or after January 1, 2017, the Franchise Tax Board to annually adjust for inflation, based upon the California Consumer Price Index, the amount of these credits. The bill would also make technical, nonsubstantive changes to the renters credit.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
The California Constitution requires the Legislature, in each fiscal year, to reimburse local governments for the revenue losses incurred by those governments in that fiscal year as a result of the homeowners property tax exemption.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
This bill would take effect immediately as a tax levy.
Discussed in Hearing
11MIN