Real property tax: Personal Income Tax Law: homeowners’ exemption: renter’s credit.

Plain English Breakdown

The official source material does not provide exact figures on how many homeowners or renters will be affected.

Homeowners' Tax Exemption Increase and Renter's Credit Boost

This legislation increases the homeowners’ property tax exemption from $7,000 to $50,000 for certain homeowners starting in fiscal year 2026-27 and raises renter’s credits under the Personal Income Tax Law.

What This Bill Does

• Increases the homeowners' property tax exemption from $7,000 to $50,000 of the full value of a dwelling for certain homeowners beginning with the lien date for the 2026–27 fiscal year.
• Boosts renter’s credits under the Personal Income Tax Law: increases it to $550 for joint filers and heads of household if their income is $50,000 or less, and to $275 for other individuals with an income of $25,000 or less.
• Requires local tax officials to handle the new exemption, which may add duties to their work.

Who It Names or Affects

• Homeowners who qualify for the increased property tax exemption.
• Renters who meet income requirements and can claim an enhanced renter’s credit on their taxes.

Terms To Know

lien date

The specific day when a property tax bill becomes legally enforceable.

tax expenditure

A reduction in government revenue due to tax breaks or credits, which is similar to direct spending by the government.

Limits and Unknowns

• The exact impact on local agencies and school districts that lose property tax revenues from this change is not fully detailed.
• It does not specify how many homeowners will qualify for the increased exemption or how many renters will benefit from the higher credit.
• Details about the specific performance indicators and data collection requirements are not provided.

Official Summary Text

SB 566, as amended, Grove.
Real property tax: Personal Income Tax Law: homeowners’ exemption: renter’s credit.
(1) Existing property tax law, pursuant to authority granted by the California Constitution, provides 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 2026–27 fiscal year, would increase the homeowners’ exemption, for certain homeowners, from $7,000 to $50,000 of the full value of a dwelling. By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
(2) 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 spouses 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, for taxable years beginning on and after January 1, 2026, would increase this credit for a qualified renter to $550 for spouses filing joint returns, heads of household, and surviving spouses, as specified, if adjusted gross income is $50,000 or less, as adjusted for inflation, and to an amount equal to $275 for other individuals, as specified, if adjusted gross income is $25,000 or less, as adjusted for inflation.
(3) Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would state the intent of the Legislature to comply with that requirement.
This bill would include additional information required for any bill authorizing a new tax expenditure.
(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for making that reimbursement.
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 the statutory provisions noted above.
(5) Existing law requires the state 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.
This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
(6) This
bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF