Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q: Are there property tax breaks in the U.S. for military veterans?
A: Property tax exemptions for veterans of the U.S. Armed Forces exist in most states. The amount of an exemption is subtracted from the value of the home, thus lowering a homeowner’s tax liability.
But, as with most property tax issues, exemptions for veterans vary depending on where the property is located. And it’s not just the benefits themselves that differ. States do not necessarily share the definition of what an eligible veteran is, according to Antoinette Balta, a lawyer and the president and co-founder of the Veterans Legal Institute in Santa Ana, California.
"There are so many definitions of what qualifies as a veteran," she said. Factors may include whether an individual served during wartime, the amount of time served and whether he or she was disabled and the extent of that disability.
The definition of disabled isn’t necessarily the same over state lines, either, Ms. Balta said. States have different ways of evaluating disabilities, and exemptions may only be available to veterans who are severely disabled.
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In California, it’s difficult to qualify for the Disabled Veterans' Exemption, which "reduces the property tax liability for qualified veterans who, due to a service-connected injury or disease, have been rated 100% disabled or are being compensated at the 100% rate due to unemployability," according to the California State Board of Equalization, which administers taxes in the state. Exemptions are only for primary residences, and a surviving spouse who remains unmarried would also qualify.
The exemption from property taxation is up to $100,000, or $150,000 for low-income veterans, according to the BOE’s website. But because of the strict requirements, none of Ms. Balta’s clients have been able to claim the benefit, she said.
In Florida, property tax exemptions vary by county, said Kevin Packman, partner at Holland & Knight law firm in Miami. Disabled veterans eligible for a complete tax exemption "are exempt from real estate taxation if gross annual household income does not exceed the adjusted maximum allowed," according to the state’s Department of Military Affairs. Local property appraisers make that determination. There are also benefits for veterans who homestead their properties.
In New York, there are three kinds of property tax benefits for vets, although they may not be claimed simultaneously, according to New York State Division of Veterans' Affairs.
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The Alternative Veterans' Exemption allows towns to exempt 15% of the assessed value of property owned by veterans who served during wartime or who received a medal for exceptional service, according to a January report by the Office of Legislative Research of the Connecticut General Assembly. The report also outlines veterans’ property tax benefits in New England.
Additional exemptions are available for those who served in a combat zone or "for disabled veterans equal to one-half of their service-connected disability ratings. Thus, a veteran who has a 50% disability qualifies for an additional 25% exemption," the report said.
An internet search should lead homeowners to information on exemptions in their own states.
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