Military veterans and their families sacrifice a great deal for our nation. As a result of their service, some Veterans are wounded or disabled in the line of duty. Deservedly, the state and federal government provide special discounts or assistance to our disabled warriors, one such benedit being a property tax exemption for veterans who are considered 100% disabled.
How to Apply for a Property Tax Exemption
A property tax exemption is exactly what it sounds like; freedom from this specific type taxation. Additionally, there are also property tax discounts and reductions. Fortunately, most U.S. states offer some property tax discount or exemption for disabled military veterans.
Removing Property Taxes From Escrow Account
First, an application for a property tax exemption may not be approved until the qualified Veteran becomes a homeowner, and applications for an exemption cannot be submitted on another person’s property.
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. After that, if an exemption or discount is approved, this documentation should be given to the mortgage servicer’s escrow department.
Keep in mind that this is a special request; some lenders may not consider the change until their standard annual review. This being said, 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
Property tax amounts vary widely depending on the county and city rates and are determined by a home’s property tax value. Additionally, the discount amount or exemption depends on the state’s specific laws.
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 in 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 a 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
Veterans must be 100% permanently disabled from a service-connected disability to receive a full tax exemption. Surviving spouses and less-than-fully disabled veterans could qualify as well.
*As a note, it should be mentioned that this is not the complete set of rules for receiving an exemption or discount.
Who Else May Qualify for a Property Tax Exemption?
As explained above, each state has its own exemption or discount variations. The benefits do not only extend to disabled vets; in some cases, everyday people or property scenarios may allow discounts.
Examples include:
- Non-disabled Veterans
- Senior citizens
- Disabled citizens
- Those with low income
- Primary residence (some states like SC offer a residential exemption)
- Farmers
- Home Renovations to old properties
- Energy Saving Improvements
- Volunteer firefighters
In conclusion, if you are a military veteran, you may have an exemption from property tax. If you are looking to buy a home or utilize a VA Loan, contact an OVM Financial Loan Officer today!