Veterans, senior citizens, and disabled persons may be entitled to property tax exemptions that reduce or eliminate tax liability. In general, veterans and their families are disproportionately reliant on state and federal support services. Senior citizens often depend on fixed incomes and an increase in the property taxes owed could force these people from their homes. Similarly, disabled persons are usually reliant on fixed incomes or lower-wage jobs, making them vulnerable to financial problems if their property tax increases. Accordingly, many states and local governments adopted property tax exemptions to assist these vulnerable populations.
How Do Property Tax Exemptions Work?
In general, residential property tax exemptions work by designating some or all of the home’s value as “exempt” from taxation. Essentially, that portion of the property does not exist to calculate the tax bill.
Property tax exemptions don’t usually change the property’s tax rate. Rather, they reduce the value of the home that is subject to the tax. The reduction could be a percentage or dollar value off the home. Some exemptions could reduce the tax bill to near zero, and others are designed to offset increases. How and to what extent property tax exemptions work depends on the state and locality.
Property Tax Exemption for Veterans
State and local programs exist to provide property tax relief for disabled and healthy veterans. To claim the exemption, veterans usually must prove that they were 50% or more disabled due to military service, they were honorably discharged from the military, and that the home is used as their primary residence. Some states also offer veterans an exemption if they below a certain income threshold (ordinarily, a calculation of the poverty line). Under either of these programs, veterans can often get substantial property tax relief.
Property Tax Exemption for Seniors
Senior citizens are more likely to be homeowners and they are uniquely vulnerable to property taxes. Property taxes may continue to increase while the homeowner’s income remains fixed. Therefore, every year, property taxes consume a larger portion of already strained fixed incomes.
The qualifying rules depend on the state and locality. In general, a senior must (1) meet the minimum age and (2) live in the home for which he or she is claiming the exemption. Some states also exclude or reduce the exemption for seniors with high incomes.
Property Tax Exemption for Disabled Persons
For seniors and veterans, the method and amount of property tax exemption available to disabled persons depend on the state. In general, to claim the exemption, the disabled person must be unable to work. In some situations, disabled persons can continue working, but incomes must remain below the threshold amounts. Some states define the income threshold as a percentage of the poverty line, and other times, it is a fixed amount per household.
Getting the Property Tax Exemption
While these programs exist, they are typically not widely advertised by the state agencies or local governments. The burden is on the person seeking the tax exemption to gather the paperwork and apply for the exemption.