California's solar property tax break ends Jan. 1, 2027: what to know

For decades, adding solar panels in California has not raised your property tax. That changes on January 1, 2027, and if you are weighing a system, the timing now carries a small but lasting cost.

What the rule is. Under Revenue and Taxation Code Section 73, building or adding an active solar energy system is excluded from being assessed as new construction. In plain terms, the county assessor does not add the value of your panels to your home's taxable value. The State Board of Equalization (BOE) confirmed in a September 1, 2026 letter to county assessors that the exclusion becomes inoperative on January 1, 2027. It was not extended.

The deadline is completion. A 2024 BOE letter explains that construction in progress during 2026 qualifies only if it is completed before January 1, 2027. A system that is still being installed on that date is not excluded. A signed contract alone does not count.

If you already have solar. The BOE says any system previously excluded as new construction will remain excluded from property tax until the property changes ownership. You will not be reassessed for it in 2027.

What it may cost after the deadline. California's base property tax rate is 1% of assessed value, and local add-ons usually bring the total a bit higher. As an example only, if an assessor added $25,000 of solar value at a 1.1% total rate, that would be about $275 a year. How your county values a system can differ, so ask your county assessor's office for the method it uses.

If you are buying a newly built home with solar. Initial buyers file form BOE-64-SES with the assessor. Under the rules described in the 2026 letter, the claim is timely if filed within three years of the purchase date, and you will need documents showing the value of the solar system in the price.

Should you rush? Not if it means skipping the steps that protect you. With under three months left, a new system needs design, a permit, installation, inspection and completion before year end. Some installers will be busy. A rushed decision on a purchase this size can cost more than a few hundred dollars a year in tax. Get any completion date promise in writing, and remember that California law gives you a right to cancel most home solar contracts within a short window after signing.

A small step for today: if you have a signed solar contract, ask your installer in writing for the expected inspection and completion date, and whether it falls before January 1, 2027.