California Veteran Benefits 2025: Property Tax, Income Tax & Financial Guide

California has historically been one of the toughest states for military retirees financially - but that's changing. In 2025, California introduced a partial military retirement tax exemption for the first time, joining the majority of states in recognizing veterans' service.

Here's what you need to know about California's veteran tax benefits, including the new military retirement exemption, property tax breaks for disabled veterans, and how these benefits stack up against the state's notoriously high cost of living.

Bottom Line Up Front

Here's what California offers veterans in 2025:

Military retirement pay: NEW partial exemption up to $20,000 (starting 2025, expires 2029)
Property tax exemption: Up to $262,950 in assessed value for 100% disabled veterans
VA disability pay: Completely tax-free (federal and state)
CalVet home loans: Competitive rates, zero down payment options
Cost of living: 50% higher than national average (critical factor)

Potential annual savings for a 100% disabled veteran: $2,000-$15,000+ depending on property value and location.

Reality check: Even with these benefits, California remains one of the most expensive states for veterans. These benefits help, but they don't eliminate the cost gap.

Income Tax Treatment for Veterans

Military Retirement Pay - NEW Partial Exemption (2025-2029)

After years of being the only state to fully tax military retirement, California finally changed course in 2024.

What's new for 2025:

Exclude up to $20,000 of military retirement pay from state income tax
Applies to tax years 2025 through 2029 (5-year program)
Income limits: $125,000 (single/head of household) or $250,000 (married filing jointly)

How it works:

Military retirement under $20,000/year? It's all exempt
Retire with $40,000/year? Exempt the first $20,000, pay tax on remaining $20,000
Retire with $60,000/year? Exempt $20,000, pay tax on remaining $40,000

The math: At California's top rate of 13.3% (though most retirees pay 6-9.3%), exempting $20,000 saves approximately $1,200-$1,860 per year.

Why This Matters

Before 2025, California was literally the only state that taxed 100% of military retirement as ordinary income. Every other state offered either full exemptions, partial exemptions, or had no income tax at all.

This new exemption doesn't make California competitive with tax-free states like Texas or Florida, but it's a step in the right direction.

VA Disability Compensation - Tax-Free

All VA disability compensation remains exempt from federal and state taxation. Whether you receive $171/month for a 10% rating or $3,946/month for 100% with dependents (2025 rates), you won't pay taxes on it.

Survivor Benefit Program (SBP)

SBP payments received by surviving spouses qualify for the same $20,000 exemption as military retirement pay, subject to the same income limits.

State Tax Rates (For Other Income)

California operates on a graduated income tax system with some of the nation's highest rates:

1% on taxable income up to $10,412 (single) or $20,824 (married)
2% on income between $10,412-$24,684 (single) or $20,824-$49,368 (married)
4% on income between $24,684-$38,959 (single) or $49,368-$77,918 (married)
6% on income between $38,959-$54,081 (single) or $77,918-$108,162 (married)
8% on income between $54,081-$68,350 (single) or $108,162-$136,700 (married)
9.3% on income between $68,350-$349,137 (single) or $136,700-$698,274 (married)
10.3% on income between $349,137-$418,961 (single) or $698,274-$837,922 (married)
11.3% on income between $418,961-$698,271 (single) or $837,922-$1,000,000 (married)
12.3% on income over $698,271 (single) or $1,000,000 (married)
13.3% additional 1% Mental Health Services Tax on income over $1,000,000

Most military retirees fall into the 6-9.3% brackets.

Comparison to Neighboring States

State	Military Retirement	Top Income Tax Rate	Property Tax Exemption (100%)
California	$20K exempt (2025-29)	13.3%	Up to $262,950 value
Nevada	N/A	No income tax	Varies by county
Oregon	Full exemption	9.9%	Varies
Arizona	Full exemption	2.5% flat	Partial exemption
Texas	N/A	No income tax	Varies by county

California's combination of limited military retirement exemption and high income tax rates makes it one of the least tax-friendly states for veterans, even with recent improvements.

Property Tax Exemptions for Veterans

100% Disabled Veterans - Substantial Exemption

If you're rated 100% Permanent and Total (P&T) by the VA, you qualify for California's Disabled Veterans' Exemption.

2025 exemption amounts:

Basic exemption: $175,298 in assessed value
Low-income exemption: $262,950 in assessed value (if household income under $78,718)

What this means: The exemption reduces the assessed value of your home, which reduces your property tax bill.

How Property Tax Works in California

California's property tax system is built on Proposition 13:

Base rate: 1% of assessed value
Additional local assessments: Typically 0.1-0.3%
Total effective rates: 0.72-1.25% depending on county

Real-World Examples

San Diego County (0.72% effective rate)

Home value: $935,000
Assessed value: $935,000
Low-income exemption: $262,950
Taxable value: $672,050
Annual tax without exemption: $6,732
Annual tax with exemption: $4,839
Annual savings: $1,893

Los Angeles County (0.82% effective rate)

Home value: $850,000
Assessed value: $850,000
Low-income exemption: $262,950
Taxable value: $587,050
Annual tax without exemption: $6,970
Annual tax with exemption: $4,814
Annual savings: $2,156

Riverside County (typical rate ~1.0%)

Home value: $625,000
Assessed value: $625,000
Low-income exemption: $262,950
Taxable value: $362,050
Annual tax without exemption: $6,250
Annual tax with exemption: $3,621
Annual savings: $2,629

Sacramento County (0.77% effective rate)

Home value: $550,000
Assessed value: $550,000
Low-income exemption: $262,950
Taxable value: $287,050
Annual tax without exemption: $4,235
Annual tax with exemption: $2,210
Annual savings: $2,025

Income Limits for Enhanced Exemption

To qualify for the $262,950 low-income exemption (versus the $175,298 basic exemption), your total household income from all sources for the prior year must not exceed $78,718 (2025 limit).

Income includes:

Military retirement pay (before exemptions)
VA disability compensation
Social Security benefits
Wages from employment
Investment income
All other income sources

Important: Many disabled veterans will exceed this income limit, which limits them to the $175,298 basic exemption.

Partial Disability Ratings

Unlike some states, California doesn't offer graduated property tax exemptions for veterans with disability ratings below 100%. The exemption is specifically for veterans rated 100% disabled or receiving 100% compensation due to individual unemployability.

Vehicle Registration Benefits

Disabled Veteran License Plates

California offers specialized license plates for disabled veterans, but unlike some states, these don't provide registration fee exemptions.

Disabled Veteran plates:

Available to veterans with service-connected disabilities
Annual fee: $47 (same as regular plates)
Purple Heart plates also available
Medal of Honor recipients get free registration

The reality: California doesn't offer the vehicle registration fee exemptions that many other states provide for disabled veterans. This is one area where the state lags behind.

CalVet Home Loan Program

While not a tax benefit, California's CalVet home loan program provides significant financial value.

Key benefits:

Competitive interest rates (often 0.25-0.35% below market)
Zero down payment options
No monthly PMI
1% origination fee
Loan limits: $806,500 standard, up to $1,209,750 in high-cost counties
Includes disaster and life insurance

2025 rates: Approximately 5.125% (versus 5.375-5.5% conventional)

Example savings:

$600,000 loan at 5.125% vs. 5.5%
Monthly payment: $3,265 vs. $3,407
Monthly savings: $142
30-year savings: $51,120

Eligibility:

90+ days active duty
Honorable discharge
Purchasing or refinancing in California
No current CalVet loan

Financial Impact Analysis

Let's calculate the 20-year financial impact for a 100% disabled veteran in California.

Scenario: E-8 Retiree, 20 Years Service, 100% Disabled

Annual income:

Military retirement: $36,000
VA disability: $47,300 (100% with dependents)
Total: $83,300

Home: $700,000 (below median for many CA metros)

California Savings Over 20 Years

Benefit	Annual Savings	20-Year Total
Property tax exemption (low-income)	$5,110	$102,200
Military retirement tax exemption	$1,860	$37,200
CalVet loan (vs conventional)	$1,704	$34,080
TOTAL	$8,674	$173,480

Note: This assumes:

0.73% effective property tax rate (state average)
9.3% state income tax bracket
CalVet loan savings over 30 years (only 20 years counted)
No increase in exemption amounts (they're indexed to inflation)

The Cost of Living Reality Check

While $173,480 in savings over 20 years sounds substantial, let's compare California to a veteran-friendly state like Texas or Florida.

Same scenario in Texas (no income tax, lower property taxes, 60% lower housing costs):

Home price: $280,000 (vs. $700,000)
Property tax: ~$5,600/year (higher rate but lower value)
Income tax: $0
20-year cost difference: ~$150,000-$250,000 saved

The bottom line: Even with veteran benefits, California's high cost of living means you'll likely spend significantly more over 20 years compared to lower-cost states.

How to Claim Your Benefits

Step 1: Military Retirement Tax Exemption (2025 Tax Year)

Timeline: Claim when filing 2025 taxes (in early 2026)

How to claim:

File California Form 540 (resident income tax return)
Complete new military retirement pay worksheet (CA FTB will release details)
Subtract up to $20,000 from taxable income
Verify your income falls under limits ($125K single / $250K married)

Documents needed:

1099-R showing military retirement distributions
Proof of total household income

Where to get help: California Franchise Tax Board (FTB) at 1-800-852-5711

Step 2: Property Tax Exemption

Timeline: Apply as soon as you receive 100% P&T rating

Required documents:

VA rating decision letter showing 100% P&T or 100% schedular
DD-214 (Certificate of Release or Discharge from Active Duty)
California driver's license or ID
Property deed or mortgage statement
Prior year tax return (for low-income exemption)
Completed form BOE-261-G

Where to apply: Your county assessor's office

County assessor offices (major counties):

Los Angeles County: (213) 974-3211 | assessor.lacounty.gov
San Diego County: (619) 236-3771 | sdarcc.gov
Orange County: (714) 834-3821 | ocassessor.gov
Riverside County: (951) 955-6200 | rivcoacr.org
San Bernardino County: (909) 387-8307 | sbcountyassessor.com
Sacramento County: (916) 875-0700 | assessor.saccounty.net
Alameda County: (510) 272-3787 | acgov.org/assessor
Santa Clara County: (408) 299-5500 | sccassessor.org
Contra Costa County: (925) 313-7400 | cocotax.org
Fresno County: (559) 600-3534 | fresnoassessor.com

Processing time: 30-90 days, depending on county

Deadline: File by February 15 to receive exemption for current tax year. If filed after February 15, exemption begins the following year.

Step 3: CalVet Home Loan (If Buying or Refinancing)

Where to start: CalVet Home Loans at 1-800-952-5626 or calvet.ca.gov

Documents needed:

DD-214 or proof of active duty service
Proof of income
Credit report
Property information

Process:

Check eligibility on CalVet website
Get pre-qualified
Find a CalVet-approved property
Complete loan application
Close on your home

Frequently Asked Questions

Will the $20,000 military retirement exemption be extended beyond 2029?

Unknown. The exemption is currently authorized for tax years 2025-2029 only. Veterans' advocacy groups are pushing to make it permanent and increase the amount, but there's no guarantee. The state's budget situation will likely determine whether it's extended.

Do I need to reapply for the property tax exemption every year?

It depends:

Basic exemption ($175,298): No, one-time filing
Low-income exemption ($262,950): Yes, must verify income eligibility annually

What if I'm rated 90% or lower?

California's disabled veterans' property tax exemption only applies to 100% disabled ratings. If you're at 90%, you don't qualify even though you're severely disabled. This is one of California's least generous aspects compared to states that offer graduated exemptions.

Can I get the property tax exemption on a second home or rental property?

No. The exemption applies only to your principal place of residence.

What counts as "100% disabled" for the property tax exemption?

Either of these qualifies:

100% Permanent & Total (P&T) rating
100% schedular rating due to individual unemployability (TDIU)

I'm rated 100% P&T but my household income is $90,000. Which exemption do I get?

You'd receive the basic exemption ($175,298) since your income exceeds the $78,718 limit for the low-income exemption. You still save money, just less than lower-income veterans.

Does the property tax exemption reduce my home's market value?

No. It only reduces the assessed value for tax purposes. Your home's actual market value and your equity remain unchanged.

What if my county denies my exemption application?

You have the right to appeal:

Request a written explanation from your county assessor
File an appeal with the county assessment appeals board
Contact CalVet for assistance: (800) 952-5626
Contact your county veterans service officer (CVSO)

Each county has a CVSO who can help navigate the process.

Are CalVet home loans better than VA loans?

It depends:

CalVet advantages:

Often lower rates (0.25-0.35% below market)
Includes disaster and life insurance
No minimum credit score

VA loan advantages:

Available nationwide
More lender options
Slightly more flexible on property types

Bottom line: If buying in California, compare both. Many veterans find CalVet offers better terms.

Can I use both the military retirement exemption and the property tax exemption?

Yes! These are separate benefits. If you're retired military AND 100% disabled, you get both.

Will these benefits affect my federal taxes?

No. State tax benefits don't impact your federal tax liability. VA disability compensation and the untaxed portion of military retirement remain tax-free federally.

Does California tax my TSP or 401(k) withdrawals?

Yes, fully, at the normal income tax rates (up to 13.3%). California doesn't offer special treatment for retirement account withdrawals like some states do.

I'm stationed in California but claim residency in another state. Can I get these benefits?

No. These are California resident benefits only. If you maintain legal residency in another state (which many active-duty service members do to avoid California taxes), you won't qualify for California veteran benefits.

What if I move to California after retiring from the military?

You can claim the military retirement exemption starting with your first full year as a California resident. The property tax exemption becomes available once you establish residency and own property.

Cost of Living Considerations

Before moving to California for veteran benefits, understand the cost reality.

Housing Costs (Median Home Prices, 2025)

San Diego: $935,000
Los Angeles: $850,000
Orange County: $1,100,000+
San Francisco Bay Area: $1,300,000+
Sacramento: $550,000
Riverside: $625,000
Fresno: $387,500
Bakersfield: $375,000

Overall Cost of Living

California's cost of living is 50% higher than the national average:

Housing: 116% above national average
Utilities: 21% above national average
Transportation: 23% above national average
Groceries: 11% above national average
Healthcare: 7% above national average

Tax Burden Beyond Income Tax

Sales tax: 7.25% state rate, up to 10.75% with local taxes (highest in nation)
Gas tax: $0.68 per gallon (highest in nation)
Vehicle registration: $200-$600+ annually based on value

Where California Veteran Benefits Make the Most Sense

You might benefit from California if:

You have strong family ties in California
Your civilian job pays significantly more in California than elsewhere
You qualify for the low-income property tax exemption
You're buying in lower-cost areas (Central Valley, Inland Empire)
You need access to world-class VA medical centers

You might be better off elsewhere if:

Maximizing retirement income is your priority
You're on a fixed income
You're flexible on location
You want to maximize savings over 20-30 years

Key Takeaways

California finally offers some military retirement relief - The $20,000 exemption saves $1,200-$1,860 annually, but it's temporary (2025-2029)
Property tax exemption provides real value - Save $2,000-$5,000+ annually depending on home value and county
California remains expensive - Even with veteran benefits, expect to pay 40-60% more than national average for cost of living
Benefits are progressive - Lower-income veterans get better property tax exemptions; higher earners may not qualify for some benefits
The math matters - Run the numbers for your specific situation before committing to California versus lower-cost states
Apply immediately - Don't leave money on the table. If you qualify for the property tax exemption, file as soon as you get your rating

Resources

California Department of Veterans Affairs (CalVet): (800) 952-5626 | calvet.ca.gov
California Franchise Tax Board (taxes): (800) 852-5711 | ftb.ca.gov
Property Tax Exemption Info: boe.ca.gov/proptaxes/dv_exemption.htm
CalVet Home Loans: (800) 952-5626 | calvet.ca.gov/home-loans
County Veterans Service Officers: Find yours at calvet.ca.gov/VetServices

Information current as of January 2025. Tax laws and benefit amounts change. Verify specific details with your county assessor and the California Franchise Tax Board before making financial decisions.

California Veteran Benefits 2025: Property Tax, Income Tax & Financial Guide

Bottom Line Up Front

Here's what California offers veterans in 2025:

Military retirement pay: NEW partial exemption up to $20,000 (starting 2025, expires 2029)
Property tax exemption: Up to $262,950 in assessed value for 100% disabled veterans
VA disability pay: Completely tax-free (federal and state)
CalVet home loans: Competitive rates, zero down payment options
Cost of living: 50% higher than national average (critical factor)

Potential annual savings for a 100% disabled veteran: $2,000-$15,000+ depending on property value and location.

Reality check: Even with these benefits, California remains one of the most expensive states for veterans. These benefits help, but they don't eliminate the cost gap.

Income Tax Treatment for Veterans

Military Retirement Pay - NEW Partial Exemption (2025-2029)

After years of being the only state to fully tax military retirement, California finally changed course in 2024.

What's new for 2025:

Exclude up to $20,000 of military retirement pay from state income tax
Applies to tax years 2025 through 2029 (5-year program)
Income limits: $125,000 (single/head of household) or $250,000 (married filing jointly)

How it works:

Military retirement under $20,000/year? It's all exempt
Retire with $40,000/year? Exempt the first $20,000, pay tax on remaining $20,000
Retire with $60,000/year? Exempt $20,000, pay tax on remaining $40,000

The math: At California's top rate of 13.3% (though most retirees pay 6-9.3%), exempting $20,000 saves approximately $1,200-$1,860 per year.

Why This Matters

This new exemption doesn't make California competitive with tax-free states like Texas or Florida, but it's a step in the right direction.

VA Disability Compensation - Tax-Free

Survivor Benefit Program (SBP)

SBP payments received by surviving spouses qualify for the same $20,000 exemption as military retirement pay, subject to the same income limits.

State Tax Rates (For Other Income)

California operates on a graduated income tax system with some of the nation's highest rates:

1% on taxable income up to $10,412 (single) or $20,824 (married)
2% on income between $10,412-$24,684 (single) or $20,824-$49,368 (married)
4% on income between $24,684-$38,959 (single) or $49,368-$77,918 (married)
6% on income between $38,959-$54,081 (single) or $77,918-$108,162 (married)
8% on income between $54,081-$68,350 (single) or $108,162-$136,700 (married)
9.3% on income between $68,350-$349,137 (single) or $136,700-$698,274 (married)
10.3% on income between $349,137-$418,961 (single) or $698,274-$837,922 (married)
11.3% on income between $418,961-$698,271 (single) or $837,922-$1,000,000 (married)
12.3% on income over $698,271 (single) or $1,000,000 (married)
13.3% additional 1% Mental Health Services Tax on income over $1,000,000

Most military retirees fall into the 6-9.3% brackets.

Comparison to Neighboring States

State	Military Retirement	Top Income Tax Rate	Property Tax Exemption (100%)
California	$20K exempt (2025-29)	13.3%	Up to $262,950 value
Nevada	N/A	No income tax	Varies by county
Oregon	Full exemption	9.9%	Varies
Arizona	Full exemption	2.5% flat	Partial exemption
Texas	N/A	No income tax	Varies by county

California's combination of limited military retirement exemption and high income tax rates makes it one of the least tax-friendly states for veterans, even with recent improvements.

Property Tax Exemptions for Veterans

100% Disabled Veterans - Substantial Exemption

If you're rated 100% Permanent and Total (P&T) by the VA, you qualify for California's Disabled Veterans' Exemption.

2025 exemption amounts:

Basic exemption: $175,298 in assessed value
Low-income exemption: $262,950 in assessed value (if household income under $78,718)

What this means: The exemption reduces the assessed value of your home, which reduces your property tax bill.

How Property Tax Works in California

California's property tax system is built on Proposition 13:

Base rate: 1% of assessed value
Additional local assessments: Typically 0.1-0.3%
Total effective rates: 0.72-1.25% depending on county

Real-World Examples

San Diego County (0.72% effective rate)

Home value: $935,000
Assessed value: $935,000
Low-income exemption: $262,950
Taxable value: $672,050
Annual tax without exemption: $6,732
Annual tax with exemption: $4,839
Annual savings: $1,893

Los Angeles County (0.82% effective rate)

Home value: $850,000
Assessed value: $850,000
Low-income exemption: $262,950
Taxable value: $587,050
Annual tax without exemption: $6,970
Annual tax with exemption: $4,814
Annual savings: $2,156

Riverside County (typical rate ~1.0%)

Home value: $625,000
Assessed value: $625,000
Low-income exemption: $262,950
Taxable value: $362,050
Annual tax without exemption: $6,250
Annual tax with exemption: $3,621
Annual savings: $2,629

Sacramento County (0.77% effective rate)

Home value: $550,000
Assessed value: $550,000
Low-income exemption: $262,950
Taxable value: $287,050
Annual tax without exemption: $4,235
Annual tax with exemption: $2,210
Annual savings: $2,025

Income Limits for Enhanced Exemption

To qualify for the $262,950 low-income exemption (versus the $175,298 basic exemption), your total household income from all sources for the prior year must not exceed $78,718 (2025 limit).

Income includes:

Military retirement pay (before exemptions)
VA disability compensation
Social Security benefits
Wages from employment
Investment income
All other income sources

Important: Many disabled veterans will exceed this income limit, which limits them to the $175,298 basic exemption.

Partial Disability Ratings

Vehicle Registration Benefits

Disabled Veteran License Plates

California offers specialized license plates for disabled veterans, but unlike some states, these don't provide registration fee exemptions.

Disabled Veteran plates:

Available to veterans with service-connected disabilities
Annual fee: $47 (same as regular plates)
Purple Heart plates also available
Medal of Honor recipients get free registration

The reality: California doesn't offer the vehicle registration fee exemptions that many other states provide for disabled veterans. This is one area where the state lags behind.

CalVet Home Loan Program

While not a tax benefit, California's CalVet home loan program provides significant financial value.

Key benefits:

Competitive interest rates (often 0.25-0.35% below market)
Zero down payment options
No monthly PMI
1% origination fee
Loan limits: $806,500 standard, up to $1,209,750 in high-cost counties
Includes disaster and life insurance

2025 rates: Approximately 5.125% (versus 5.375-5.5% conventional)

Example savings:

$600,000 loan at 5.125% vs. 5.5%
Monthly payment: $3,265 vs. $3,407
Monthly savings: $142
30-year savings: $51,120

Eligibility:

90+ days active duty
Honorable discharge
Purchasing or refinancing in California
No current CalVet loan

Financial Impact Analysis

Let's calculate the 20-year financial impact for a 100% disabled veteran in California.

Scenario: E-8 Retiree, 20 Years Service, 100% Disabled

Annual income:

Military retirement: $36,000
VA disability: $47,300 (100% with dependents)
Total: $83,300

Home: $700,000 (below median for many CA metros)

California Savings Over 20 Years

Benefit	Annual Savings	20-Year Total
Property tax exemption (low-income)	$5,110	$102,200
Military retirement tax exemption	$1,860	$37,200
CalVet loan (vs conventional)	$1,704	$34,080
TOTAL	$8,674	$173,480

Note: This assumes:

0.73% effective property tax rate (state average)
9.3% state income tax bracket
CalVet loan savings over 30 years (only 20 years counted)
No increase in exemption amounts (they're indexed to inflation)

The Cost of Living Reality Check

While $173,480 in savings over 20 years sounds substantial, let's compare California to a veteran-friendly state like Texas or Florida.

Same scenario in Texas (no income tax, lower property taxes, 60% lower housing costs):

Home price: $280,000 (vs. $700,000)
Property tax: ~$5,600/year (higher rate but lower value)
Income tax: $0
20-year cost difference: ~$150,000-$250,000 saved

The bottom line: Even with veteran benefits, California's high cost of living means you'll likely spend significantly more over 20 years compared to lower-cost states.

How to Claim Your Benefits

Step 1: Military Retirement Tax Exemption (2025 Tax Year)

Timeline: Claim when filing 2025 taxes (in early 2026)

How to claim:

File California Form 540 (resident income tax return)
Complete new military retirement pay worksheet (CA FTB will release details)
Subtract up to $20,000 from taxable income
Verify your income falls under limits ($125K single / $250K married)

Documents needed:

1099-R showing military retirement distributions
Proof of total household income

Where to get help: California Franchise Tax Board (FTB) at 1-800-852-5711

Step 2: Property Tax Exemption

Timeline: Apply as soon as you receive 100% P&T rating

Required documents:

VA rating decision letter showing 100% P&T or 100% schedular
DD-214 (Certificate of Release or Discharge from Active Duty)
California driver's license or ID
Property deed or mortgage statement
Prior year tax return (for low-income exemption)
Completed form BOE-261-G

Where to apply: Your county assessor's office

County assessor offices (major counties):

Los Angeles County: (213) 974-3211 | assessor.lacounty.gov
San Diego County: (619) 236-3771 | sdarcc.gov
Orange County: (714) 834-3821 | ocassessor.gov
Riverside County: (951) 955-6200 | rivcoacr.org
San Bernardino County: (909) 387-8307 | sbcountyassessor.com
Sacramento County: (916) 875-0700 | assessor.saccounty.net
Alameda County: (510) 272-3787 | acgov.org/assessor
Santa Clara County: (408) 299-5500 | sccassessor.org
Contra Costa County: (925) 313-7400 | cocotax.org
Fresno County: (559) 600-3534 | fresnoassessor.com

Processing time: 30-90 days, depending on county

Deadline: File by February 15 to receive exemption for current tax year. If filed after February 15, exemption begins the following year.

Step 3: CalVet Home Loan (If Buying or Refinancing)

Where to start: CalVet Home Loans at 1-800-952-5626 or calvet.ca.gov

Documents needed:

DD-214 or proof of active duty service
Proof of income
Credit report
Property information

Process:

Check eligibility on CalVet website
Get pre-qualified
Find a CalVet-approved property
Complete loan application
Close on your home

Frequently Asked Questions

Will the $20,000 military retirement exemption be extended beyond 2029?

Do I need to reapply for the property tax exemption every year?

It depends:

Basic exemption ($175,298): No, one-time filing
Low-income exemption ($262,950): Yes, must verify income eligibility annually

What if I'm rated 90% or lower?

Can I get the property tax exemption on a second home or rental property?

No. The exemption applies only to your principal place of residence.

What counts as "100% disabled" for the property tax exemption?

Either of these qualifies:

100% Permanent & Total (P&T) rating
100% schedular rating due to individual unemployability (TDIU)

I'm rated 100% P&T but my household income is $90,000. Which exemption do I get?

You'd receive the basic exemption ($175,298) since your income exceeds the $78,718 limit for the low-income exemption. You still save money, just less than lower-income veterans.

Does the property tax exemption reduce my home's market value?

No. It only reduces the assessed value for tax purposes. Your home's actual market value and your equity remain unchanged.

What if my county denies my exemption application?

You have the right to appeal:

Request a written explanation from your county assessor
File an appeal with the county assessment appeals board
Contact CalVet for assistance: (800) 952-5626
Contact your county veterans service officer (CVSO)

Each county has a CVSO who can help navigate the process.

Are CalVet home loans better than VA loans?

It depends:

CalVet advantages:

Often lower rates (0.25-0.35% below market)
Includes disaster and life insurance
No minimum credit score

VA loan advantages:

Available nationwide
More lender options
Slightly more flexible on property types

Bottom line: If buying in California, compare both. Many veterans find CalVet offers better terms.

Can I use both the military retirement exemption and the property tax exemption?

Yes! These are separate benefits. If you're retired military AND 100% disabled, you get both.

Will these benefits affect my federal taxes?

No. State tax benefits don't impact your federal tax liability. VA disability compensation and the untaxed portion of military retirement remain tax-free federally.

Does California tax my TSP or 401(k) withdrawals?

Yes, fully, at the normal income tax rates (up to 13.3%). California doesn't offer special treatment for retirement account withdrawals like some states do.

I'm stationed in California but claim residency in another state. Can I get these benefits?

What if I move to California after retiring from the military?

Cost of Living Considerations

Before moving to California for veteran benefits, understand the cost reality.

Housing Costs (Median Home Prices, 2025)

San Diego: $935,000
Los Angeles: $850,000
Orange County: $1,100,000+
San Francisco Bay Area: $1,300,000+
Sacramento: $550,000
Riverside: $625,000
Fresno: $387,500
Bakersfield: $375,000

Overall Cost of Living

California's cost of living is 50% higher than the national average:

Housing: 116% above national average
Utilities: 21% above national average
Transportation: 23% above national average
Groceries: 11% above national average
Healthcare: 7% above national average

Tax Burden Beyond Income Tax

Sales tax: 7.25% state rate, up to 10.75% with local taxes (highest in nation)
Gas tax: $0.68 per gallon (highest in nation)
Vehicle registration: $200-$600+ annually based on value

Where California Veteran Benefits Make the Most Sense

You might benefit from California if:

You have strong family ties in California
Your civilian job pays significantly more in California than elsewhere
You qualify for the low-income property tax exemption
You're buying in lower-cost areas (Central Valley, Inland Empire)
You need access to world-class VA medical centers

You might be better off elsewhere if:

Maximizing retirement income is your priority
You're on a fixed income
You're flexible on location
You want to maximize savings over 20-30 years

Key Takeaways

California finally offers some military retirement relief - The $20,000 exemption saves $1,200-$1,860 annually, but it's temporary (2025-2029)
Property tax exemption provides real value - Save $2,000-$5,000+ annually depending on home value and county
California remains expensive - Even with veteran benefits, expect to pay 40-60% more than national average for cost of living
Benefits are progressive - Lower-income veterans get better property tax exemptions; higher earners may not qualify for some benefits
The math matters - Run the numbers for your specific situation before committing to California versus lower-cost states
Apply immediately - Don't leave money on the table. If you qualify for the property tax exemption, file as soon as you get your rating

Resources

California Department of Veterans Affairs (CalVet): (800) 952-5626 | calvet.ca.gov
California Franchise Tax Board (taxes): (800) 852-5711 | ftb.ca.gov
Property Tax Exemption Info: boe.ca.gov/proptaxes/dv_exemption.htm
CalVet Home Loans: (800) 952-5626 | calvet.ca.gov/home-loans
County Veterans Service Officers: Find yours at calvet.ca.gov/VetServices