Non-profit and Welfare Property Tax Exemptions

California offers a variety of property tax exemptions for organizations that use real or personal property for religious, hospital, scientific, or charitable purposes. To qualify, property must be owned and operated by an eligible nonprofit organization, foundation, or corporation and be used exclusively for an exempt purpose.

Most institutional exemptions require annual filings, due February 15 each year.  Property tax exemptions for non-profit entities are not automatic.

More information is available from the State Board of Equalization here: Property Tax Exemptions

Property eligible for these exemptions must be used EXCLUSIVELY for an exempt purpose.  Any other use of the property, including use by other not for profit entities must be disclosed on the annual filings.

Welfare Exemption

The Welfare Exemption is available to religious, hospital, scientific, and charitable organizations, including non-profit low-income housing providers. It applies only to owned real or personal property.

When filing a Welfare Exemption claim, applicants must provide:

The State Board of Equalization (BOE) determines whether an organization qualifies.  The Assessor’s Office determines whether the use of the property qualifies.  The property must be used exclusively for an exempt purpose.  Any non-exempt use of the property, including use by non-qualifying entities, prohibits the application of the exemption on those portions used for non-qualifying purposes.

More information regarding the welfare exemption is available from the State Board of Equalization here:  Property Tax Welfare Exemption

A Welfare Exemption First Filing must be submitted for every new location. Please note the following:

  • Separate Claims: A unique filing is required for each year you seek an exemption.
  • Ongoing Requirement: You must submit a first filing for every tax year until the Assessor has officially granted the exemption and issued findings for those specific years.

To maintain exempt status, a property must be filed for annually.

  • Mailing Schedule: In late December, the Assessor’s Office mails claim forms to all entities that were granted an exemption in the prior calendar year.
  • Deadlines: Claims must be submitted by February 15th to be considered timely.

If a claim is filed after the February 15th deadline, it is subject to a penalty of the assessed value:

  • 10% Penalty: Applies if the claim is received by December 31st of the calendar year.
  • 15% Penalty: Applies if the claim is received after the calendar year has ended.

Note: Total penalties are capped at a maximum of $250 in taxes per organization, per calendar year.

Low-income housing may qualify for exemption when owned by a non-profit organization or a limited partnership with a nonprofit as the managing general partner. Properties may qualify if they meet one or more of the following:

  • The property is financed with tax-exempt bonds or federal, state, or local loans or grants; rents must remain within regulatory agreement limits.
  • The owner receives low-income housing tax credits.
  • At least 90% of tenants qualify as low-income households (for nonprofit-owned properties).

Low-income housing exemptions require filing the Welfare Exemption.

Housing owned by a religious organization may be exempt if it is incidental to the organization’s primary religious activities. This exemption also requires filing the Welfare Exemption.  Information regarding the occupant's position or role in the organization with a statement indicating that the housing continues to be used for organization's exempt purpose must be included with the filing each year.  Housing is not eligible for church or religious exemptions.

Church and Religious Exemption

The Church Exemption applies to owned or leased real or personal property used exclusively for religious worship or parking.  Note: Areas used for fellowship, classes, offices, or other non-worship activities do not qualify under this exemption.  Church exemption claims must be filed with the Assessor each year to maintain the exemption.

The Church Exemption is most often used for leased property. Religious organizations that own their property typically benefit more from the broader Religious Exemption or Welfare Exemption.

The Religious Exemption is available to religious organizations for owned real property, as well as owned or leased personal property. It is more expansive than a Church exemption and covers property used exclusively for:

  • Worship
  • Fellowship activities
  • Religious counseling
  • Administrative offices
  • Parking
  • Schools (grades 12 and under)

Each year, the Assessor sends the organization a renewal statement to confirm continued eligibility. 

Property that is used for other purposes, such as housing for religious personnel or used by other community groups, may qualify for exemption under the Welfare Exemptions.

Additional information regarding the Religious and And Church exemptions is available from the State Board of Equalization here:  Property Tax Exemptions for Religious Organizations

Public School Exemption

This exemption is available to public schools, including charter schools, and is commonly used for leased real or personal property.  Eligible uses include:

  • Classroom instruction
  • Administrative operations
  • Administrative support services

Charter schools must provide a copy of their charter with their application.

College Exemption

Private four-year colleges may receive the College Exemption for owned or leased real or personal property used for educational purposes.

Cemetery Exemption

The Cemetery Exemption is available to both nonprofit and for-profit cemeteries. Additional restrictions apply to for-profit cemetery property.

Free Public Library or Free Museum Exemption

Property used as a library or museum that is free and open to the public on January 1 may qualify for exemption, whether the property is owned or leased. To qualify, the property must:

  • Be used primarily as a library or museum
  • Maintain regular, posted hours
  • Be clearly identifiable to the public

Libraries and museums may request optional donations, as long as no one is denied entry for not contributing.

Lessor’s Exemption

The Lessor’s Exemption applies when a property owner leases real property to qualifying exempt organizations, including:

  • Free public libraries and museums
  • Public schools, community colleges, and state universities
  • University of California campuses
  • Churches
  • Nonprofit colleges

Both the property owner and the exempt organization must sign the claim. The benefit of the exemption must be passed to the exempt organization through a rent reduction or direct refund, unless otherwise stated in the lease. A copy of the lease is required with the first claim.

Welfare Exemption Claim Forms

Supplemental Affidavits and forms

Low Income Housing Supplemental Forms

Church Exemption

  • Church Exemption (BOE 262-AH)
  • Church Lessor's Exemption Claim (BOE 263-C) - Property leased by a church to a public school, community college, state college, or state university, including the University of California, used jointly with a church.

Religious Exemption

Public School

College Exemption

Cemetery Exemptions

Free Museum or Library

Lessor Exemptions

  • Lessors' Exemption Claim (BOE 263) - To be filed by lessor.
    Property used for free public libraries and free museums and for property used exclusively for public schools community colleges, state colleges, state universities, University of CA, churches and nonprofit colleges. The benefit of the exemption must go to the exempt organization in the form of a rent reduction or direct refund, unless otherwise stated in the lease.
  • Qualified Lessors' Exemption (BOE 263-A) - To be filed by lessor.
    Claim for exemptions claimed on property used for free public libraries and free museums and for property used exclusively for public schools, community colleges, state colleges, state universities, University of California, and nonprofit colleges. For property which is being purchased with an agreement granting the lessee the option to acquire the leased property for one dollar or another nominal amount at the end of the lease.

No. In California, income tax exemption and property tax exemption are handled separately. While you need a federal or state income tax exemption letter to apply, you must also prove to the Board of Equalization (BOE) and the County Assessor that the property is used exclusively for religious, hospital, scientific, or charitable purposes.

Before you can file for a property tax exemption with the county, your organization must obtain an OCC from the State Board of Equalization.

  • The BOE reviews your organization’s mission and bylaws.
  • The Assessor reviews how you actually use the physical property.

You cannot receive a local exemption without a valid OCC.

To qualify, your organization’s formative documents (like Articles of Incorporation) must contain a specific statement. This statement must clarify that the property is irrevocably dedicated to an exempt purpose and that, upon dissolution, the assets will be distributed to another qualified non-profit—not to any private individual.

Yes, but both parties must qualify. If you (the owner) lease your property to another non-profit (the operator), the property can still be exempt if:

  • Both organizations are engaged in exempt activities.
  • Both organizations have a valid OCC.
  • The owner files Form BOE-267-O to report the outside use.

Yes, you can still receive an exemption if other entities use your property, but it adds a layer of complexity to your filing. In California, the "Welfare Exemption" requires that the property be used exclusively for exempt purposes.

If another organization uses your space, you must ensure they also meet the state's strict requirements. or the property to remain exempt while being used by another group:

  • The User Must Qualify: The other entity must be a non-profit organized for religious, hospital, scientific, or charitable purposes.
  • The Use Must Qualify: Their activity on your property must also be an exempt activity (e.g., a non-profit school using a church hall for classes).

If a for-profit entity (like a commercial yoga studio or a private consultant) uses a portion of your property (even on a limited basis):

  • Partial Exemption: You will likely receive a disqualified percentage. For example, if a for-profit business leases 10% of your square footage, that 10% of the property value will be taxed, while the remaining 90% remains exempt.

Generally, no.  

  • Fundraising: Property used primarily for fundraising is usually taxable, even if the money goes to a good cause.
  • Thrift Stores: These are typically taxable unless they are part of a formal, planned rehabilitation program (e.g., job training for the disabled or disadvantaged) where the sale of goods is secondary to the training mission.

You can still file! However, as noted in your policy, you will face a 10% or 15% penalty on the assessed value. While the penalty is capped at $250, it is still best to file on time to ensure your exemption is processed smoothly for the upcoming fiscal year.

No. The Welfare Exemption only applies to ad valorem property taxes (taxes based on the value of the property). You are still responsible for "Special Assessments" or "Direct Charges" for services like street lighting, emergency services, or school bonds that appear on your tax bill.