For veterans with a 100% VA disability rating, the path to homeownership is filled with financial benefits that can make owning a home significantly more affordable. Among the most impactful benefits is the VA disability property tax exemption, available in select states like Texas, Florida, and 12 others.
This exemption eliminates property taxes on a primary residence, freeing up funds and creating long-term financial stability. In this comprehensive guide, we’ll share three essential tips for buying your next home with this exemption, complete with guidelines, compensation grids, and practical steps for navigating the process.
What is a 100% VA Disability Property Tax Exemption?
A VA disability property tax exemption is a state-offered benefit for veterans rated 100% disabled by the Department of Veterans Affairs. It waives property taxes on a veteran’s primary residence, saving thousands of dollars annually.
Not every state offers this benefit, but 14 states, including Texas and Florida, provide 100% tax exemptions for eligible veterans. Applying and maximizing these benefits can reduce housing costs and create financial freedom.
The 14 States Offering 100% VA Disability Property Tax Exemptions
Veterans in the following states can qualify for full property tax exemptions:
Alabama, Arkansas, Florida, Hawaii, Illinois, Louisiana, Maryland, Michigan, New Jersey, New Mexico, Oklahoma, South Carolina, Texas, and Virginia
These states honor veterans with 100% disability ratings by removing property tax burdens, enabling significant long-term savings.
Tip #1. Understand The Guidelines For Your State
Each state has rules and processes for veterans to apply for property tax exemptions. Below is a general overview and specific instructions for Texas and Florida, two of the most veteran-friendly states.
General Application Guidelines
Submit Your VA Disability Letter
Provide a letter from the Department of Veterans Affairs confirming your 100% disability rating.
Note: You will not need to disclose details about your disability.
File a State-Specific Application
States require you to complete their unique application forms, often available through your local tax authority.
Provide Proof of Residency
Documents like driver’s licenses, utility bills, or voter registrations are typically required to confirm state residency.
Follow Deadlines
Check with your local tax authority for application deadlines to ensure timely filing.
Specific Guidelines for Texas and Florida
Texas VA Disability Property Tax Exemption
Submit your VA Disability Letter to your county appraisal district.
File the Texas Homestead Exemption Form, available from your local appraisal office.
Include proof of residency, such as a utility bill or voter registration card.
Florida VA Disability Property Tax Exemption
Provide your VA Disability Letter to your county property appraiser’s office.
File the Florida Property Tax Exemption Application (due by March 1 annually).
Attach proof of Florida residency, such as a driver’s license or voter registration card.
As a veteran-owned business, Beacon Lending prides itself on advocating for Veterans and helping them navigate this process. Most recently, we were able to help a Veteran purchase a home in Texas with only their disability letter verifying they are 100% service-connected disabled.
This not only allowed the veteran to close on their home loan with the tax exemption, but it also helped them qualify for a higher-priced home, as the taxes were not escrowed into the closing costs and were not part of the Debt-to-Income Ratio, saving the Veteran thousands of dollars in closing costs.
Initially, the veteran’s challenge was that they thought they would need to file a lot of paperwork with the county in Texas before we could close their loan with the tax exemption. Luckily, in Texas specifically, we can use just the 100% VA Disability Award Letter as evidence for the tax exemption.
Tip 2: Use the VA Disability Compensation Calculator to Plan Your Finances
Understanding your VA disability compensation can help you plan your home purchase and maximize savings. Below is a detailed breakdown of compensation rates, which can be combined with your property tax exemption for financial planning. Remember that you only need a 10% rating on your VA Disability to have your VA Funding Fee waived entirely, saving you tens of thousands of dollars throughout your home-buying journey.
VA Disability Compensation Calculator
Use the table below to estimate your monthly disability compensation based on your VA disability rating and dependents.
| Dependent Status | 30% | 40% | 50% | 60% | 70% | 80% | 90% | 100% |
|---|---|---|---|---|---|---|---|---|
| Veteran Alone | $537.42 | $774.16 | $1,102.04 | $1,395.93 | $1,759.19 | $2,044.89 | $2,297.96 | $3,831.30 |
| Veteran with Spouse Only | $600.97 | $859.24 | $1,208.64 | $1,524.05 | $1,907.81 | $2,215.04 | $2,489.63 | $4,044.91 |
| Veteran with One Parent | $588.67 | $841.81 | $1,187.11 | $1,498.43 | $1,879.11 | $2,181.21 | $2,451.71 | $4,002.74 |
| Veteran with Two Parents | $639.92 | $909.46 | $1,272.19 | $1,600.93 | $1,999.04 | $2,317.54 | $2,605.46 | $4,174.18 |
| Veteran with Spouse and Child | $648.12 | $921.76 | $1,286.54 | $1,617.33 | $2,017.49 | $2,340.09 | $2,630.06 | $4,201.34 |
| Add for Each Child Under 18 | $31.78 | $42.03 | $52.28 | $63.55 | $73.80 | $84.05 | $95.33 | $106.14 |
Use these figures to estimate how much you’ll receive in monthly compensation, which can be applied toward your mortgage or other homeownership expenses.
Beacon Lending has over 30 years of combined experience with all of our loan partners and team to ensure that every Veteran will have a clear path to obtaining their property tax exemption. We have helped many veterans achieve the exemption to ensure a smooth home-buying experience.
Tip 3: Combine Property Tax Exemptions with VA Loan Benefits
Maximize your savings by pairing the 100% property tax exemption with a VA home loan. These advantages include :
No Down Payment: VA loans do not require a down payment, allowing you to keep more cash.
No Private Mortgage Insurance (PMI): This option avoids the additional costs associated with PMI, saving you hundreds monthly.
Competitive Interest Rates: VA loans often feature lower rates than conventional loans, reducing your long-term costs.
No VA Funding Fee is Required, and as little as 10% VA Disability is required. This will save the veteran tens of thousands of dollars over the course of their home-buying lifetime.
Frequently Asked Questions
1. How does the VA disability property tax exemption work in Texas for 100% disabled veterans?
Answer: In Texas, veterans with a 100% disability rating from the VA qualify for a 100% property tax exemption on their primary residence. This means they are exempt from paying property taxes on their homestead. To apply, veterans must submit the appropriate application form and their VA disability award letter to their local appraisal district.
2. What are the eligibility requirements for partial VA disability property tax exemptions in Texas?
Answer: Veterans with a disability rating of less than 100% may qualify for partial property tax exemptions in Texas. The exemption amount depends on the disability percentage. For example, a 50% disabled veteran may receive a $10,000 exemption. Surviving spouses and minor children of qualifying veterans may also be eligible under certain conditions.
3. Can surviving spouses of disabled veterans claim property tax exemptions in Florida?
Answer: In Florida, surviving spouses of disabled veterans may qualify for property tax exemptions. Suppose the veteran was 100% disabled, and the exemption was in place before their death. In that case, the surviving spouse may continue to benefit from the exemption as long as they do not remarry and use the property as their primary residence.
4. What documents are required to apply for a VA property tax exemption in Florida?
Answer: To apply for a VA property tax exemption in Florida, you’ll need:
- A completed exemption application form (available from your county property appraiser’s office).
- A copy of the VA disability award letter.
- Proof of residency (e.g., driver’s license or utility bill).
- Documentation verifying homestead ownership, such as the property deed.
5. How is the VA property tax exemption calculated for veterans with less than 100% disability in Florida?
Answer: Florida offers a reduced assessed property value proportional to the veteran’s disability rating. For instance, a veteran with a 50% disability rating may receive a 50% reduction in their home’s taxable value. The exemption depends on the county’s tax rates and the home’s assessed value.
6. What is the process for disabled veterans to transfer their property tax exemption if they move within Texas?
Answer: Disabled veterans moving within Texas can transfer their property tax exemption to a new primary residence. They must notify the new county’s appraisal district and reapply, providing documentation such as their VA disability rating and proof of ownership for the new property.
7. Are VA disability property tax exemptions in Florida affected by changes in disability rating?
Answer: If a veteran’s disability rating changes, the property tax exemption may be adjusted accordingly. Veterans should notify their county property appraiser’s office with updated documentation from the VA to ensure their exemption reflects the current rating.
8. Do partial VA disability property tax exemptions in Texas apply to multiple properties?
Answer: VA disability property tax exemptions in Texas apply only to a veteran’s primary residence (homestead property). Investment properties or secondary homes are not eligible for this exemption.
9. Can veterans with a VA loan in Texas still qualify for property tax exemptions?
Answer: Veterans with a VA loan can qualify for property tax exemptions in Texas. The loan type does not impact eligibility. The exemption reduces the property’s assessed taxable value, potentially lowering escrow payments if taxes are included in the monthly mortgage.
10. What deadlines should veterans know for applying for a VA property tax exemption in Florida?
Answer: To qualify for the property tax exemption in Florida, veterans should apply by March 1 of the tax year. Late applications may be accepted under specific circumstances, but veterans should confirm deadlines and conditions with their local property appraiser’s office.
Conclusion
Choosing Beacon Lending to guide you through the VA disability property tax exemption process means partnering with a team that understands veterans’ unique challenges and opportunities. As a veteran-led company, we combine personal experience with professional expertise to ensure you get the maximum benefits you’ve earned. Our friendly, solutions-driven approach simplifies the process, helping you navigate applications, meet deadlines, and confidently secure your exemptions.
Whether you’re a veteran, a surviving spouse, or simply seeking clarity on your options, Beacon Lending is here to light the way to financial relief and homeownership success. Let us help you take full advantage of your hard-earned benefits—contact us today!
About the Author
NMLS# #244003
Brian Quigley has been in the Denver mortgage industry since 2003. Customer satisfaction has been his top priority while guiding clients through the home loan qualification process. He is proficient in all types of mortgage financing including FHA/VA, Conventional, USDA, Jumbo, Portfolio, 1031 Exchanges, Reverse Mortgages, Refinancing, Construction loans, and FHA 203K loans.
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