The new construction exclusion for a rain water capture system was approved by voters in 2018 and implemented by Revenue and Taxation Code §74.8.
Section 74.8(b) provides that a “rain water capture system” is a facility designed to capture, retain, and store rain water flowing off a building rooftop or other manmade aboveground hard surface for subsequent onsite use. A “facility” is something designed, built, or installed to serve a particular purpose. The exclusion is not applicable to portable rain water capture systems, since they are items of personal property.
The new construction exclusion is available when the construction of the rain water capture system is completed between January 1, 2019 and January 1, 2029. Improvements that may be excluded from assessment include items such as above- or in-ground tanks, piping, pumps, or filtration systems. A rain water capture system does not include the roof of a building.
To receive the rain water capture system exclusion, the initial buyer must file a claim with the Assessor and provide any documents necessary to identify the value attributable to the rain water capture system that was included in the purchase price of the new building. The claim must also identify the amount of any rebate for the rain water capture system provided to either the owner-builder or the initial purchaser.
The exclusion is not available if the owner-builder already received the exclusion or the building became subject to assessment to the owner-builder on the lien date (January 1) following the completion of the construction.
A property owner who adds a rain water capture system to an existing structure does not have to file for the exclusion. The exclusion is automatically granted when the assessor receives a copy of the building permit.
Additional information regarding the exclusion is also available at the BOE’s Website
Initial Purchaser Claim For Rain Water Capture System New Construction Exclusion
The assessor will evaluate the claim and determine the portion of the purchase price that is attributable to the rain water capture system. The assessor will then reduce the new base year value established as a result of the change in ownership of the new building by an amount equal to the difference between the following two amounts:
1. That portion of the value of the new building attributable to the rain water capture system.
2. The total amount of all rebates, if any, that were provided to either the owner-builder or the initial purchaser.