Military veterans have sacrificed so much for our country. Because of this sacrifice, some Veterans have military-related disabilities. The state and federal government provide special discounts or assistance to our deserving disabled warriors. One such benefit involves a property tax exemption for 100% disabled veterans.
Thus, it is possible to own a home with potentially no property tax bills. How about buying a house and not having a property tax bill? Property tax amounts vary widely depending on the county and city property tax rates. Another factor is the home’s property tax value. The discount amount or exemption depends on the state’s specific laws.
How to Apply for a Property Tax Exemption
A property tax exemption means free from taxation. Then, a property tax discount is a “reduction” in taxation. Fortunately, most U.S. states offer some property tax discount or exemption for disabled military veterans. Additionally, there may be discounts or exemptions for retirees, low income, or disabled. Since each state has different levels of discounts, you can imagine that the process would differ from state to state.
Removing Property Taxes From Escrow Account
First of all, this may not always be the case. Our experience is that an application for a property tax exemption may not be approved until the qualified Veteran owns the home. Someone typically cannot apply for an exemption until they are a homeowner. Someone can’t apply for an exemption on another person’s property. Therefore, when purchasing a home, the property taxes will be charged at closing. Furthermore, if the buyer obtains a mortgage with an escrow account, the taxes will need to be included in the payment.
Once the veteran is a homeowner, the exemption application, and supporting documentation must be provided to the county and possibly local entity. If an exemption or discount is approved, give this documentation to the mortgage servicer’s escrow department. Request a review and amendment to remove or lower the property tax amount in the escrow account. Keep in mind, that this is a special request and some lenders may not consider the change until their standard annual review. Although, a Veteran should push for this immediate change.
In review, the process for removing property taxes from a mortgage payment would look like this:
- Discuss requirements and possible qualification with county up-front
- Home purchase closing takes place
- Complete exemption or discount paperwork
- If approved, contact escrow department for the mortgage servicer
- Ask for a review and amendment to your escrow account. Request removal of property tax from the payment
- Provide documentation to the escrow department
Veteran Property Tax Exemptions by State
Florida Tax Exemption
Homestead Tax Exemptions for Veterans allows for being exempt from taxation. Plus, Florida has no state income tax for residents as well! A Veteran must have been honorably discharged and have a rated, service-connected, permanent and total disability to obtain eligibility. Also, there are chances for surviving spouses or a lower tax discount for less than 100% disabled. Must be a permanent Florida resident on January 1 of the tax year which the exemption is being claimed.
Georgia Tax Exemption
The exemption is the greater of $32,500 or the maximum amount allowed under 38 USC 2101. The maximum amount is $60,000 plus an index factor). Disabled Veteran Homestead Tax Exemption available to one of the following: VA rated 100% disabled, less than 100% disabled but paid at 100% due to unemployment, statutory award for loss of feet, hands, or sight, surviving unmarried spouse of qualified deceased Veteran, or surviving minor children of qualified deceased Veteran.
North Carolina Tax Exemption
Up to $45,000 in tax value may be excluded for service connected, permanently disabled and honorably discharged Veterans. Also, an unmarried surviving spouse of this Veteran or a Veteran receiving benefits for specially adapted housing under 38 U.S.C 2101 may be eligible for the discount as well.
South Carolina Tax Exemption
Persons 100% permanently and disabled from a service-connected disability by the U.S. Department of Veterans Affairs, an Ex-POW, or a Medal of Honor recipient may be tax exempt of property taxes in SC. Additionally, a surviving spouse may qualify for the exemption. Furthermore, it could be transferred to another dwelling.
Tennessee Tax Exemption
The maximum market value on which tax relief is calculated is $100,000. To receive a property tax discount, one of the following must be met: Service-connected disability resulted in Paraplegia or permanent paralysis, loss of use 2 or more limbs or legal blindness. Permanent and total disability is service-connected as determined by Veteran Affairs. 100% total and permanent disability from being a prisoner of war.
Texas Tax Exemption
There are several property tax exemption programs available for Veterans in Texas! 100% service-connected disabled Veterans may be fully exempt from property taxes. 10 – 90% disabled allows for discounts of tax value ranging from $5,000 – $12,000. Qualified surviving spouses of disabled Veterans may also qualify for benefits. Also, most states only provide discounts for a primary residence, but Texas has a discount on other properties too.
Virginia Tax Exemption
Must be 100% permanently and disabled from a service-connected disability to receive a full tax exemption. Surviving spouses and even less than fully disabled could qualify as well.
Keep in mind that the above is not the complete rules for receiving an exemption or discount. If you’re a Veteran and looking to buy a home, let’s also discuss your possible qualification for purchase and possible tax discount.
Who Else Qualifies for a Property Tax Exemption?
As mentioned above, each state has its exemption or discount variations. Not all benefits are for disabled vets. Additionally, everyday people or property scenarios that may allow discounts include:
- Non-disabled Veterans
- Senior citizens
- Disabled citizens
- Low income
- Primary residence (some states like SC offer a residential exemption)
- Home Renovations to old properties
- Energy Saving Improvements
- Volunteer firefighters
There could be more people or property scenarios which could qualify for some property tax discount. It is always important to ask as you never know. It could save you money.
Watch out for tax discounts taken by the current owner – If you are buying a home and researching property taxes.