California—Property Tax: Solar Energy System Exclusion Extended

In California there are basically two ways that your property taxes can be reassessed at full market value. One is when you sell or purchase the real property. The second is if you have new construction or have a major addition to the real property. There are numerous tax incentives both in California and at the Federal level to promote green energy. One such incentive includes the California property tax rules which were amended to provide an exclusion from classification as newly constructed for the construction or addition of an active solar energy system. Thus, if you install a solar energy system on your rooftop that will not cause your property taxes to increases because of new construction. The exclusion however was set to expire in 2015-16. The good news is that the exclusion has been extended and now applies to property tax lien dates through 2023-24 fiscal year. Under the new amendments the exclusion is repealed January 1, 2025 (formerly 2017). Therefore, active solar energy systems that qualify for the exclusion prior to January 1, 2025 (formerly, 2017) will continue to be excluded on and after that date until there is a subsequent change in ownership. See S.B. 871, Laws 2014, effective June 20, 2014. This is great news for anyone interested in installing a solar energy system because your property tax base will not be reassessed at fair market value and it will continue to increase at no more than 2 percent per year under Proposition 13. That is as long as Proposition 13 does not get repealed or amended.

If you are an owner of real estate or solar energy provider in California and have questions about property taxes or other types of solar tax incentives, please contact the Wilson Tax Law Group. We can be reached 714-463-4430.

California—Property Tax: Solar Energy System Exclusion Extended

In California there are basically two ways that your property taxes can be reassessed at full market value. One is when you sell or purchase the real property. The second is if you have new construction or have a major addition to the real property. There are numerous tax incentives both in California and at the Federal level to promote green energy. One such incentive includes the California property tax rules which were amended to provide an exclusion from classification as newly constructed for the construction or addition of an active solar energy system. Thus, if you install a solar energy system on your rooftop that will not cause your property taxes to increases because of new construction. The exclusion however was set to expire in 2015-16. The good news is that the exclusion has been extended and now applies to property tax lien dates through 2023-24 fiscal year. Under the new amendments the exclusion is repealed January 1, 2025 (formerly 2017). Therefore, active solar energy systems that qualify for the exclusion prior to January 1, 2025 (formerly, 2017) will continue to be excluded on and after that date until there is a subsequent change in ownership. See S.B. 871, Laws 2014, effective June 20, 2014. This is great news for anyone interested in installing a solar energy system because your property tax base will not be reassessed at fair market value and it will continue to increase at no more than 2 percent per year under Proposition 13. That is as long as Proposition 13 does not get repealed or amended.

If you are an owner of real estate or solar energy provider in California and have questions about property taxes or other types of solar tax incentives, please contact the Wilson Tax Law Group. We can be reached 714-463-4430.