Governor Newsom signed SB 296 on September 28, 2026. It's the biggest change to California's disabled veteran property tax exemption in decades. Instead of taking a fixed dollar amount off your home's value, it exempts a percentage of the home's value, up to the first $1,000,000, and for many 100% disabled veterans that means no property tax based on the home's value at all.
What SB 296 does
| Your household income | Today's exemption (2027) | With SB 296 |
|---|---|---|
| $83,474 or less | $278,836 off assessed value | 100% of the value, up to $1,000,000 |
| More than $83,474 | $185,889 off assessed value | 50% of the first $1,000,000 (or $185,889, whichever is more) |
Income limit and current-law amounts are for the January 1, 2027 lien date and adjust each year. Source: SB 296 (enrolled text) and the CA State Board of Equalization.
Yes, VA disability pay counts toward the income limit
For the 100% level, "household income" includes taxable and non-taxable income for everyone in the household. That means your VA disability compensation, Social Security and SSI, pensions, a spouse's wages, and even some gifts all count. California's Board of Equalization says all veteran's benefits and Social Security benefits are included.
A 100% rating alone is about $47,000 a year in VA pay, so many veterans with a working spouse will land above $83,474. That's fine: the 50% exemption has no income limit, and it's still a big upgrade over today's exemption. If you're close to the line, add up every source of household income to see which level you'll get.
Homes assessed over $1 million
SB 296 only applies to the first $1,000,000 of your home's assessed value. You still pay property tax on anything above that. Example: a $1,160,000 assessed value in Los Angeles County at a 1.2% rate:
| Exempt | Tax per year | Per month | |
|---|---|---|---|
| No exemption | $0 | $13,920 | $1,160 |
| Income over $83,474 (50% of first $1M) | $500,000 | $7,920 | $660 |
| Income $83,474 or less (first $1M) | $1,000,000 | $1,920 | $160 |
The $160,000 above the cap is still taxed ($1,920 a year at 1.2%). Mello-Roos and special assessments are extra.
Example: a veteran with a $600,000 assessed value and household income over $83,474 gets $300,000 exempt under SB 296, compared with $185,889 today, which saves about $1,300 more a year at a 1.15% tax rate. With household income of $83,474 or less, the property tax on the home's value drops to about $0.
Who qualifies
- Veterans rated 100% disabled by the VA or their branch, or paid at the 100% rate for unemployability (TDIU).
- Veterans who are blind in both eyes or have lost the use of two or more limbs from a service-connected injury or disease.
- Unmarried surviving spouses can receive the same exemption when certain conditions are met.
- The home must be your principal residence in California.
When it starts and how long it lasts
- It applies to property tax lien dates on or after January 1, 2027. That's the 2027–28 tax year (bills mailed in fall 2027).
- It runs through the January 1, 2031 lien date and ends before 2032 unless the Legislature extends it.
- Your 2026–27 bill (this year's) still uses today's exemption.
What it doesn't cover
- Mello-Roos, special assessments and flat fees on your tax bill are generally separate charges, not taxes on your home's value, so plan on still paying them. In newer Temecula, Murrieta and Menifee neighborhoods, those can be a big part of the bill.
- It replaces the current exemption rather than stacking on top of it. You get the SB 296 exemption instead of the old one, not both.
Property tax savings calculator
Estimate what SB 296 could save you starting with the 2027–28 tax year. Grab your latest property tax bill if you have it: you need your home's assessed (net taxable) value and ideally your tax rate.
SB 296 applies to the first $1,000,000 of assessed value; tax on any value above that is still owed. Estimate only. Covers the property tax based on your home's value (the 1% base rate plus voter-approved bonds). Mello-Roos, special assessments and flat fees on your bill are separate and generally still owed. Your county assessor decides eligibility and the final amount.
Get your free savings report (PDF)
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How to claim it
County assessors and the State Board of Equalization still have to publish the forms and filing steps for the new exemption. Here's what we know now and how to get ready:
- Get your VA benefit summary letter showing your 100% rating (or 100% for unemployability). SB 296 requires a letter from the VA or your military branch.
- Gather proof of household income if you'll claim the 100% level: VA award letter, Social Security statements, tax returns and pay stubs for everyone in the household. VA disability pay counts.
- Already have today's exemption? Watch for a notice from your county assessor about switching to the new one for 2027.
- Buying a home? File with the county assessor right after closing so the exemption starts as soon as possible.
Ready to file? Our step-by-step Form BOE-261-G guide has the form to download for your county, what to attach, deadlines and where to file for San Diego, Riverside, Orange, Los Angeles and San Bernardino counties. We'll update it as soon as counties release SB 296 steps.
Why this matters when you buy
Property tax is part of your monthly house payment. Paying less of it can mean a lower payment, or more home for the same budget. If you're 100% disabled you also skip the VA funding fee, so between the two you could save thousands a year.
Sources: Office of the Governor, September 28, 2026 · SB 296 bill summary (Digital Democracy) · CA State Board of Equalization: Disabled Veterans' Exemption. This is general information, not tax or legal advice; your county assessor determines eligibility.
Common questions
Did California pass a new property tax exemption for disabled veterans?
Yes. Governor Newsom signed SB 296 on September 28, 2026. Starting with the January 1, 2027 lien date, 100% disabled veterans get 50% of the first $1,000,000 of their home's value exempt, or 100% of the first $1,000,000 if household income is $83,474 or less.
Who qualifies for SB 296?
Veterans rated 100% disabled or paid at 100% for unemployability (TDIU), veterans blind in both eyes or who lost the use of two or more limbs from service, and certain unmarried surviving spouses. The home must be their principal residence.
What's the income limit for the 100% exemption?
$83,474 of household income for the 2027 lien date. The figure adjusts each year. Above it, you get 50% of the first $1,000,000 of the home's value exempt (or $185,889, whichever is more).
Does VA disability compensation count toward the $83,474 income limit?
Yes. Household income includes taxable and non-taxable income, including VA disability compensation, Social Security and SSI, pensions and a spouse's wages. If you're over the limit you still get the 50% exemption, which has no income limit.
Is there a cap on the SB 296 exemption?
Yes. It applies to the first $1,000,000 of assessed value. With household income of $83,474 or less, up to $1,000,000 is exempt; above that income, 50% of the first $1,000,000 (up to $500,000) is exempt. Tax on value above $1,000,000 is still owed.
When does SB 296 take effect?
It applies starting with the January 1, 2027 lien date, meaning the 2027–28 property tax bill, and runs through the 2031 lien date unless extended.
Does SB 296 cover Mello-Roos?
Generally no. The exemption applies to the property tax based on your home's assessed value. Mello-Roos, special assessments and flat fees are separate charges and usually still apply.
See your real numbers
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Educational information only, not a commitment to lend or a loan approval. VA guidelines and lender requirements change; your eligibility and terms depend on your full application, credit, income and VA entitlement.