Property Tax Exemptions for Disabled Veterans

Property Tax Exemptions for Disabled Veterans

Property tax exemptions represent one of the most valuable state-level benefits available to disabled veterans. While federal VA disability compensation provides monthly payments, state property tax exemptions can save thousands of dollars every year in reduced or eliminated property taxes on your home.

Many states provide 100% property tax exemption for veterans rated 100% permanently and totally disabled (P&T). This means you pay $0 in property taxes on your primary residence. For a veteran with a $300,000 home in a state with a 2.5% effective property tax rate, this saves $7,500 per year - $75,000 over 10 years.

Even if you're not rated 100%, many states offer graduated benefits based on your disability rating percentage, or flat-dollar exemptions that reduce your annual property tax bill. These benefits are in addition to your VA disability compensation - they don't reduce or offset your federal benefits.

How Property Tax Exemptions Work

Property tax exemptions reduce the taxable value of your property, which in turn reduces the amount of property tax you owe. There are several types of exemptions:

100% Property Tax Exemption

Many states provide complete property tax exemption for veterans rated 100% permanently and totally disabled. This means:

• Your property tax bill is reduced to $0
• The exemption typically applies to your primary residence only
• There may be a cap on the home value that qualifies (varies by state)
• The exemption continues as long as you remain 100% P&T and occupy the property

Partial Exemptions Based on Rating

Some states offer graduated exemptions tied to your disability rating percentage. For example:

• 50% disabled = 50% property tax exemption
• 70% disabled = 70% property tax exemption
• 100% disabled = 100% property tax exemption

Fixed-Dollar Exemptions

Other states provide exemptions that reduce your property's assessed value by a fixed amount based on disability rating. For example, California offers up to $200,000 in property value exemption for disabled veterans, which can reduce annual property taxes by $2,000-$4,000 depending on your local tax rate.

Homestead Exemptions

Many states combine disabled veteran exemptions with homestead exemptions that apply to all homeowners. The veteran exemption is in addition to the standard homestead exemption, maximizing your savings.

States with the Best Property Tax Benefits

The following states offer particularly generous property tax benefits for disabled veterans:

Texas

Benefit: 100% property tax exemption for 100% P&T disabled veterans with no cap on home value.

Partial Rating Benefits: Partial exemptions for ratings 10-90%: $5,000 exemption (10-29%), $7,500 exemption (30-49%), $10,000 exemption (50-69%), $12,000 exemption (70%+).

Surviving Spouse: Surviving spouse retains the exemption if they do not remarry and remain in the home.

Savings Example: A veteran with a $400,000 home saves approximately $10,000/year in property taxes.

Florida

Benefit: 100% property tax exemption for 100% P&T disabled veterans (must be Florida resident).

Partial Rating Benefits: $5,000 additional homestead exemption for combat-disabled veterans with at least 10% rating.

Surviving Spouse: Surviving spouse retains full exemption if they hold property title, remain in the home, and do not remarry.

South Carolina

Benefit: 100% property tax exemption for 100% P&T disabled veterans on primary residence and one vehicle.

Surviving Spouse: Surviving spouse retains the exemption if they remain unmarried.

California

Benefit: Basic veteran exemption ($4,000 property value exemption) plus disabled veteran exemption ($150,000 for veterans with household income below $91,141, or $200,000 for household income below $182,276 in 2025).

Requirement: Must be honorably discharged and service-connected disabled.

Savings Example: $200,000 exemption at 1.25% effective tax rate saves $2,500/year.

Illinois

Benefit: Annual exemption up to $250,000 for 100% disabled veterans returning from active duty in an armed conflict. Standard Disabled Veterans' Standard Homestead Exemption reduces assessed value by $2,500 annually.

Surviving Spouse: Benefits may continue for surviving spouse under certain conditions.

New York

Benefit: Alternative Veterans Exemption provides graduated exemptions: 50% exemption for 70%+ disabled, reducing to lower percentages for lower disability ratings. Eligible Veterans Exemption ranges from $5,000-$125,000 based on wartime service and disability.

Other Notable States

• Georgia: $96,000 property value exemption for 100% disabled veterans
• Louisiana: Special assessment freeze for 100% disabled veterans (property taxed at value when exemption started)
• New Jersey: $250 annual property tax deduction for veterans
• Arizona: Property value reduction based on disability rating percentage
• Oklahoma: 100% property tax exemption for 100% disabled veterans

TDIU and Property Tax Exemptions

Veterans receiving TDIU (Total Disability Individual Unemployability) are considered permanently and totally disabled for purposes of most state property tax exemptions. This is critical because TDIU pays at the 100% rate but your schedular rating may be below 100%.

Most states recognize TDIU as equivalent to a 100% P&T schedular rating for property tax exemption purposes. However, some states have specific requirements or interpretations of what constitutes "100% P&T" for their exemption programs.

When applying for property tax exemption with TDIU:

• Provide your VA award letter clearly showing TDIU status
• Emphasize that you are "permanently and totally disabled" per the VA (TDIU recipients are considered P&T for dependent benefits purposes)
• If your county initially denies the exemption, request clarification on their P&T requirements and appeal if necessary
• Contact your county veterans service office for assistance navigating state-specific rules

Some counties may require additional documentation beyond your VA award letter. Be prepared to provide any supplemental information they request.

Surviving Spouse Benefits

Many states allow surviving spouses of disabled veterans to continue receiving property tax exemptions after the veteran's death. This ensures that widows and widowers can remain in their homes without facing increased property tax burdens.

Common Surviving Spouse Requirements

• Remain unmarried: Most states terminate the exemption if the surviving spouse remarries
• Occupy the property: The home must remain the surviving spouse's primary residence
• Hold title to the property: The surviving spouse must have ownership interest in the property
• No time limit: Most states allow the exemption to continue indefinitely as long as requirements are met

States with Generous Surviving Spouse Provisions

• Texas: Surviving spouse retains full 100% exemption if they remain unmarried and occupy the property
• Florida: Surviving spouse retains exemption if holding title, living in the home, and not remarried
• South Carolina: Surviving spouse retains 100% exemption while unmarried
• Oklahoma: Surviving spouse continues to receive benefits under certain conditions

If you're a surviving spouse, contact your county property appraiser or tax assessor immediately after the veteran's death to confirm continued eligibility and ensure the exemption transfers properly. You may need to file paperwork to update the exemption in your name.

How to Apply for Property Tax Exemptions

Applying for property tax exemptions requires filing an application with your county property appraiser or tax assessor's office. The process varies by state, but generally follows these steps:

Step 1: Determine Eligibility

Research your state's property tax exemption programs:

• Contact your county property appraiser or tax assessor
• Visit your county website for veteran property tax information
• Contact your county veterans service office for guidance
• Check your state's department of veterans affairs website

Step 2: Gather Required Documentation

Most applications require:

• VA award letter: Current letter showing your disability rating and P&T designation
• DD-214: Certificate of Release or Discharge from Active Duty (showing honorable discharge)
• Property information: Deed, mortgage statement, or property tax bill
• Proof of residency: Driver's license, voter registration, utility bill showing the property is your primary residence
• Social Security number: For you and possibly your spouse

Step 3: Complete and Submit Application

• Obtain the application form from your county property appraiser/tax assessor
• Complete all sections thoroughly and accurately
• Attach all required documentation
• Submit before the application deadline (often January-March for the following tax year)
• Keep copies of everything you submit

Step 4: Wait for Approval

Processing times vary by county. You should receive written notification of approval or denial within 30-90 days. If approved, the exemption typically applies retroactively to the beginning of the tax year you applied.

Step 5: Verify Exemption on Tax Bill

When you receive your annual property tax bill, verify that the exemption is correctly applied. If the exemption is missing or incorrect, contact your property appraiser's office immediately to resolve the issue.

Important Application Tips

• Apply as soon as you're eligible: Don't wait - apply as soon as you receive your 100% P&T rating
• Meet application deadlines: Missing the deadline may delay your exemption by a full year
• File annually if required: Some states require annual reapplication or certification
• Report changes: Notify the county if you move, your rating changes, or other relevant circumstances change
• Get help if needed: County veterans service officers can assist with applications

Other State Tax Benefits

Beyond property tax exemptions, many states offer additional tax benefits for disabled veterans:

Income Tax Exemptions

Most states (and the federal government) do not tax VA disability compensation. Some states go further by exempting military retirement pay for disabled veterans or providing additional income tax credits.

Vehicle Registration Fee Exemptions

Many states waive or reduce vehicle registration fees for disabled veterans. Some states provide free specialty license plates for disabled veterans, while others waive all registration fees for 100% disabled veterans.

Sales Tax Exemptions

A few states offer sales tax exemptions on certain purchases for disabled veterans, such as vehicles, adaptive equipment, or home modifications.

Hunting and Fishing License Exemptions

Most states provide free or discounted hunting and fishing licenses for disabled veterans. Many offer lifetime licenses at no cost for 100% disabled veterans.

State Parks and Recreation

Many states offer free entry to state parks, camping fee waivers, or discounted annual passes for disabled veterans and their families.

Contact your state's department of veterans affairs or visit their website to learn about all benefits available in your state.

Common Property Tax Exemption Questions

Do I Need to Reapply Every Year?

It depends on your state and county. Most states require one-time application with annual certification or verification of continued eligibility (often as simple as signing a form confirming you still occupy the property). Some states require full reapplication every few years. Check with your county for specific requirements.

Can I Get the Exemption if I Have a Mortgage?

Yes. Property tax exemptions are available regardless of whether you own your home outright or have a mortgage. If you pay property taxes through escrow as part of your mortgage payment, notify your mortgage company of the exemption so they can adjust your monthly payment downward.

What if I Move to a Different State?

Property tax exemptions are state-specific and do not transfer between states. When you move, you'll need to apply for property tax exemptions in your new state. Your eligibility and benefit amount will be based on your new state's laws, which may be more or less generous than your previous state.

What if My Rating Changes?

If your rating increases, your property tax exemption may increase (in states with graduated benefits). Notify your county assessor of rating increases. If your 100% rating is reduced below 100%, you may lose the full exemption, though you might still qualify for a partial exemption based on your lower rating.

Does the Exemption Apply to Rental Properties?

Generally no. Property tax exemptions typically apply only to your primary residence (homestead). Rental properties, vacation homes, and investment properties usually don't qualify. Some states allow the exemption on one property only, which must be your primary residence.

Next Steps

Property tax exemptions can save disabled veterans thousands of dollars every year. If you're rated 100% P&T (or have TDIU), apply for your state's property tax exemption as soon as possible. Even if you're rated below 100%, check whether your state offers benefits for partial disability ratings.

Don't leave money on the table - property tax exemptions are one of the most valuable state benefits available, and they're yours for the taking. Contact your county property appraiser or county veterans service office today to start the application process.