In Northern Virginia, where retired Air Force pilot Curt Sheldon works as a certified financial planner, housing is expensive and property tax bills can sting.
“Property taxes of $5,000 per year and greater are common, and it’s not unheard of to exceed $10,000 per year in property taxes,” says Sheldon, whose firm, C.L. Sheldon & Company, primarily serves active-duty and former service members.
But in Virginia, veterans who have a disability rated by the Department of Veterans Affairs (VA) as 100 percent permanent and total (P&T) are exempt from property taxes on their primary residence. A 2021 state law also exempts them from personal property taxes on one vehicle.
The savings “can be significant,” Sheldon says. “Around 30 to 40 percent of my clients have a 100 percent permanent and total disability rating.”
Most states give former service members with disabilities a break on their property taxes, but the scale and scope of exemptions vary widely. For example:
- Many states limit the exemption to veterans with a 100 percent VA disability rating, but some go as low as 10 percent. (The ratings determine VA compensation levels.)
- The VA has different kinds of 100 percent disability (see sidebar, “Disability rating types”), and some states limit which kinds qualify for a tax break.
- A few states reduce property taxes for all veterans, regardless of medical condition, or base benefits on other criteria, such as age or income.
There may be other eligibility criteria, such as whether a veteran was honorably discharged or served during wartime. The details can even vary from county to county. Contact your state’s tax office or veterans affairs office for more information, or to get help applying or documenting your eligibility.
Disability rating types
The VA rates disability on a scale of 0 to 100 percent, in 10 percent increments, based on the severity of a service-connected condition (meaning an illness or injury incurred during or worsened by active service). A veteran who is rated 100 percent disabled is generally entitled to receive the VA’s maximum monthly disability compensation rate. But there are different kinds of 100 percent disability, and not all states recognize all types for property tax purposes.
- Permanent and total (P&T) disability means a veteran has a service-connected condition the VA has determined will not improve.
- Temporary 100 percent disability is a condition that is fully disabling but not permanent, and the VA anticipates the veteran’s health will improve over time
- Individual unemployability is a VA designation for veterans deemed unable to work due to a service-related disability. They can receive the maximum compensation rate even if their disability rating is less than 100 percent.
Veterans who have a 100 percent disability rating or receive the maximum VA compensation rate due to unemployability are exempt from property taxes. Also, a home that a veteran acquired with a specially adapted housing grant is exempt from property taxes as long as it is owned and occupied by the veteran or a surviving spouse who has not remarried.
More information: Alabama Department of Revenue
Veterans with a disability rating of 50 percent or higher are exempt from property taxes on the first $150,000 of assessed valuation (the exemption amount is higher in some boroughs).
More information: Alaska Department of Military and Veterans Affairs
Veterans with disabilities can qualify for an exemption on their 2023 property taxes if the assessed value of their home is less than $29,418 and their income is below $36,077. The amount of the tax break is tied to disability rating.
More information: Arizona Department of Revenue
Veterans with a P&T disability can receive a full property tax exemption on their personal property, their home and up to 40 acres adjacent to the home (provided the land is not used for commercial purposes). So can veterans who have been awarded special monthly compensation from the VA for the loss or lost use of one or more limbs or total blindness in one or both eyes.
More information: Arkansas Commissioner of State Lands
Veterans who have a 100 percent disability rating or who receive the 100 percent compensation rate due to unemployability can exempt up to $161,083 from the assessed value of their primary residence in 2023. Qualified veterans with disabilities with income below $72,335 in 2023 can exempt up to $241,627 from their home’s assessed value.
More information: California State Board of Equalization
Veterans with a 100 percent P&T rating can exempt up to $100,000 of the value of their primary residence from property taxes. Surviving spouses of service members who died in the line of duty or whose death resulted from a service-related injury or disease are also eligible.
More information: Colorado Department of Military and Veterans Affairs
All eligible veterans who served during a designated period of war qualify for a standard exemption that reduces the assessment of their home by $1,000 to $8,000, depending on the county, plus an additional exemption based on income. Veterans with a disability receive an extra property tax break determined by their disability rating and county of residence.
More information: Connecticut Office of Policy and Management
Veterans who have lived in the state for at least three years and have a 100 percent P&T disability rating or an unemployability designation are eligible for a partial property tax credit on their primary residence. New Castle County fully exempts such veterans from property taxes.
More information: Delaware Department of Finance
District of Columbia
Veterans who have a permanent and total disability or are designated unemployable are eligible for a $445,000 reduction in the assessed value of their principal residence if their household income is less than $139,900.
More information: D.C. Mayor’s Office of Community Affairs
Florida offers four kinds of service-related property tax breaks.
- Veterans who have a 100 percent P&T rating or are confined to a wheelchair can qualify for a full exemption from property taxes.
- Veterans with a lower disability rating can get a reduction of up to $5,000 on their property’s assessed value.
- Veterans with a lower disability rating who are 65 or older may qualify for an additional reduction in the assessed value of their primary residence, with the amount based on their percentage of disability.
- Service members and veterans who were deployed outside of the U.S. for a designated operation during the previous calendar year can get an exemption proportionate to the amount of time they were deployed on a designated operation.
More information: Florida Department of Revenue
For the 2023 tax year, veterans with a 100 percent disability rating or unemployable status can exempt up to $109,986 from their property’s value. The same break is available to veterans who receive payment from the VA for loss (or loss of use) of one or both feet or hands or loss of sight in both eyes.
More information: Georgia Department of Veterans Service
In three of Hawaii’s four counties, veterans with a 100 percent disability are fully exempt from property taxes except for a $150 minimum tax. In Maui County, this exemption is available to veterans with a disability rating of 70 percent or higher.
More information: Hawaii Office of Veterans’ Services
Veterans with a 100 percent disability rating or an unemployability designation can get a property tax reduction of up to $1,500, regardless of income. Veterans with a lower disability rating may qualify for a 2024 property tax reduction of $250 to $1,500 if their 2023 income is $37,000 or less.
Veterans with a lower disability rating or who receive a VA pension for a non-service-connected disability can apply for a property tax deferral if their 2023 income is $58,304 or less.
More information: Idaho State Tax Commission
Veterans with disabilities who own homes assessed at less than $250,000 for tax purposes get full or partial property tax exemptions, depending on their disability rating.
- 30 percent or 40 percent: $2,500 reduction in taxable assessed value
- 50 percent or 60 percent: $5,000 reduction in taxable assessed value
- 70 percent or more: full property tax exemption
Also, veterans who used a federal specially adapted housing grant can qualify for up to a $100,000 reduction on the home’s assessed value.
More information: Illinois Revenue
Veterans with property assessed at $200,000 or less can deduct $14,000 from their home’s assessed value if they have a permanent and total disability or are 62 or older and have a disability rating of at least 10 percent. Wartime veterans may qualify to deduct $24,960 from their property’s assessed value.
More information: Indiana Department of Veterans Affairs