Question: What is the difference between filing a Declaration of Homestead and a Homeowners Exemption? My home is in Los Angeles County. Can I use these documents on a deed-restricted property located in a common interest development with a homeowner association and the covenants, conditions and restrictions? Are there any other exemptions I might qualify for to reduce property taxes?
Answer: Declaration of Homestead and a Homeowners Exemption are different legal documents with different functions. Both can be used on a deed-restricted property located in a common interest development.
The Declaration of Homestead is designed to protect a portion of your home's equity from creditors, and the Homeowners Exemption aids in the reduction of your real property taxes. The key to getting the full benefit of both documents is not to procrastinate in completing the forms and filing the paperwork.
In California, the Declaration of Homestead pertains to property located anywhere in the state and is not limited to deed-restricted property and homeowners associations. Its purpose is to protect a certain amount of equity in your home from attachment by creditors.
Any titleholder-homeowner can declare a qualifying dwelling as a homestead by filling out a declaration form, which must be notarized and recorded at the county recorder's office to be valid.
In Los Angeles County, a Homeowners Exemption gives residential property owners a $7,000 deduction from the assessed value before taxes are levied.
New property owners automatically receive an exemption application, however, because most owners are unclear about what that application is and they fail to complete it and send it in. For forms and information, call (213) 974-3211 or (888) 807-2111.
Here are additional exemptions that may apply for certain individuals or situations:
Veteran's exemption: If you are a disabled veteran who is blind in both eyes, has lost the use of two or more limbs or is totally disabled as a result of injury or disease incurred in military service, you may be eligible for an exemption of up to $150,000 of the assessed value of your home. The Veterans Administration must certify the veteran's disability. Unmarried surviving spouses of certain deceased veterans also may qualify.
For forms and information, call (213) 974-3399.
Disaster relief: You may be eligible for tax relief if your property is damaged or destroyed by a calamity, such as a fire or flooding. To qualify, you must file a misfortune or calamity claim with the county assessor's office within 12 months from the date the property was damaged or destroyed. The loss must exceed $10,000 of current market value.
For information, call (213) 974-8658. The application form for reassessment, form ADS-820.2, is available online at http://www.assessor.lacounty.gov.
Exclusion for seniors and disabled: Disabled titleholders or seniors ages 55 or over who buy or construct a residence of equal or lesser value than their original home may transfer the old assessed value to the new home under Propositions 60, 90 and 110.
For information, call (213) 974-3441. The forms for disabled persons claiming a transfer of base-year value to a replacement home, form OWN-112, and for those 55 and older who what to make a similar transfer, form OWN-89, are available online at http://www.assessor.lacounty.gov.
Parent or grandparent with child exclusions: The transfer of real property between parents and children or from grandparents to grandchildren may be excluded from reappraisal under Propositions 58 and 193.
For information call: (213) 974-3441. Forms OWN-88 OWN-143 are available online at http://www.assessor.lacounty.gov.
Generally, Proposition 58 states that real property transfers, from parent to child or child to parent, may be excluded from reassessment. Proposition 193 expands this tax relief to include transfers from grandparent to grandchild.
In both cases, a claim must be filed within three years of the date of transfer to receive the full benefit of the exclusion. Similarly, certain transfers to revocable trusts may be exempt from reassessment pursuant to Revenue and Tax Code section 11930.
If your property is not located in Los Angeles County, contact your county assessor's office and your local county recorder's office for filing information and forms.
Zachary Levine, a partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295 or email@example.com.