Property Tax Post: Land of the Free, Home of the High Cost of Living—Are Property Tax Exemptions for Veterans Enough?


On November 11 many of us will be celebrating the day that honors those who have fought and who continue to fight and die for our country. As we charge the grocery stores and brave the long lines at Costco for troves of hamburgers, hotdogs, and mini American flag decorated cupcakes in anticipation of the last “official” BBQ holiday of the year (weather permitting), we should give pause for the millions of veterans who are facing an uphill battle. Some of those veterans are narrowly avoiding homelessness with the overall rise in costs of living and property values across the nation. Is America the land of the free and home to homeless veterans?

Considering that there are many complex factors that influence homelessness, including access to affordable housing and supportable income, if a disabled veteran already owns a home or can afford to buy a home, the need for legislative change to provide more property tax assistance is ever apparent. According to the National Coalition for Homeless Veterans, 12 percent of the homeless adult population in this country are veterans, 68 percent of homeless vets live in large cities, and 32 percent reside in suburban or rural areas.  Thankfully many states are offering qualified disabled veterans property tax breaks to lessen the financial strain, but eligibility and details vary.

Property Tax Exemptions Based on Disability Rating

Most states offer some type of property tax exemption for disabled vets and spouses.  Relief is generally provided by exempting a portion of a property’s assessed value from tax, based on the veteran’s disability rating.  In Texas for example, a veteran with a 50 percent disability rating but less than 70 percent receives a $10,000 reduction in assessed property value. So if the veteran has a home valued at $200,000, he or she will pay property taxes on $190,000. 

Connecticut gets pretty specific when detailing eligibility.  The state provides a standard exemption of $1,000 for veterans that are not disabled, an exemption for disabled veterans that ranges from $1,500 to $3,000, and an exemption for severely disabled veterans that ranges from $5,000 to $10,000.

What’s Happening with Legislation?

New York is making a positive expansion to its property tax system and tailoring it to assisting veterans with homeownership.  Recently, Senator Kenneth P. LaValle and State Assemblyman Fred W. Thiele Jr. introduced New York A.B. 6223, which allows taxing districts to raise the exemption cap for veterans. Each county, city, town, village, or school district is allowed to adopt a local law to increase the maximum exemption.

On August  17, 2015, Illinois enacted Senate Bill 107, to expand eligibility for the Disabled Veteran’s Homestead Exemption, to allow “service-connected” disability ratings of 30 percent (down from 50 percent) to receive a minimum annual exemption of $2,500—and those veterans who are more than 70 percent disabled will be completely exempt. (This exemption was expanded from $5,000). The Chicago Tribune covered the Disabled Veteran’s Homestead Exemption event on September 25th celebrating the passing of the bill and interviewed State Representative Rita Mayfield about the need for this law. She stated, “[t]here are several who have lost their homes or in the process of losing their homes.  They simply cannot afford to pay the taxes.”

Last year, Ohio enacted H.B. 85 to increase the amount of the homestead exemption for military veterans who are 100 percent disabled from $25,000 to $50,000.  There are no income requirements under this legislation, which allows for an expanded exemption for veterans who qualify and who are permanently disabled.

Will providing greater exemptions for lower disability ratings create a rise homeownership? Or at least decrease the numbers of vets that are beaten down by high property tax bills? For those veterans struggling to pay their property tax bills and living in states that need property tax reform, the battle continues. To the states with large veteran populations that are making strides toward increasing property tax exemptions to help our veterans, I salute you. 

Continue the discussion on LinkedIn: Have you thanked a veteran lately?

For more information about state tax issues, sign up for a  free trial on Bloomberg BNA’s Premier State Tax Library.

By Cynthia N. Wells