For disabled veterans, the best states for property tax exemptions are Texas, Florida, Arkansas, South Carolina, Michigan, and Virginia, each of which eliminates the entire property tax bill on the primary residence of a veteran rated 100 percent service-connected disabled. A handful of other states match that full waiver with conditions attached, and several more offer partial exemptions large enough to zero out the bill on a typical home. Which state actually saves you the most depends on your disability rating, whether you own rural acreage, and whether you want the exemption to follow a surviving spouse to a new home.
States That Wipe Out the Entire Property Tax Bill
Texas
Texas exempts the full appraised value of a 100 percent disabled veteran’s homestead. Veterans rated at 100 percent and those receiving compensation based on individual unemployability both qualify. The feature that puts Texas at the top for long-term planning is portability for surviving spouses: an unremarried surviving spouse keeps the exemption on the same property, and if they move, they can transfer a dollar-equivalent exemption to the new home.1State of Texas. Texas Tax Code 11.131 – Residence Homestead of 100 Percent or Totally Disabled Veteran
Florida
Florida exempts any real estate used as a homestead by a veteran with a service-connected total and permanent disability. The veteran must be a permanent Florida resident as of January 1 of the tax year.2The Florida Legislature. Florida Code 196.081 – Exemption for Certain Permanently and Totally Disabled Veterans With no state income tax layered on top, Florida is a common relocation choice for cutting the overall tax burden.
Arkansas
Arkansas is unusually generous on land. A veteran with a 100 percent permanent disability rating, or one receiving special monthly compensation for loss or loss of use of limbs or total blindness, pays no state taxes on the homestead or personal property. The homestead includes the dwelling plus up to 40 contiguous acres, provided the land isn’t used commercially.3Justia Law. Arkansas Code 26-3-306 – Disabled Veterans, Surviving Spouses For veterans with rural property, that acreage cap dwarfs the one- and five-acre limits in other states.
South Carolina
South Carolina fully exempts the home and up to five acres for veterans with a total, permanent, service-connected disability, and extends the exemption to up to two privately owned passenger vehicles. Surviving spouses can claim the exemption immediately, whether or not the veteran had applied before death.4South Carolina Department of Revenue. Veterans – Learn More About SC Property Tax Exemptions
Michigan
Michigan exempts the entire value of a disabled veteran’s homestead. The exemption continues for an unremarried surviving spouse and applies to any homestead the spouse owns, including a property acquired after the veteran’s death.5Michigan Legislature. Michigan Compiled Laws 211.7b – Exemption of Real Property Used and Owned as Homestead by Disabled Veteran or Surviving Spouse That flexibility matches Texas for long-term security.
Virginia
Virginia exempts the primary residence of a veteran rated 100 percent service-connected, permanent, and totally disabled. The baseline covers the dwelling and one acre, but if a locality already provides a larger acreage exemption for seniors or disabled residents under a separate program, the disabled veteran exemption must match that larger amount. Surviving spouses qualify as long as they don’t remarry, and the exemption follows them to a new principal residence with no restriction on where they move.6Virginia Code Commission. Virginia Code 58.1-3219.5 – Exemption From Taxation for Disabled Veterans If the disability rating is granted after the home purchase, the exemption applies retroactively to the rating date.
Others That Fully Waive the Tax
- Oklahoma exempts the full fair cash value of the homestead for veterans with a 100 percent permanent service-connected disability resulting from military action, accident, or disease contracted during service.7Oklahoma Department of Veterans Affairs. Oklahoma Department of Veterans Affairs Benefits Information
- New Jersey provides an annual exemption on the principal residence for honorably discharged veterans who are 100 percent permanently and totally disabled from active duty service.8State of New Jersey. 100% Disabled Veteran Property Tax Exemption
- Maryland exempts the dwelling house and surrounding yard for veterans whose 100 percent service-connected disability is permanent and total.9Department of Veterans and Military Families. Tax Exemptions
- New Mexico waives all property taxes on the principal residence for veterans determined under federal law to have a 100 percent permanent and total service-connected disability, including community property shared with a spouse.
- Alabama exempts the homestead from all state ad valorem taxes for veterans with a 100 percent permanent and total disability rating.
Full Exemptions With Strings Attached
Pennsylvania offers a full real estate tax exemption, but adds a financial need test. Veterans with household income of $114,637 or less receive a presumption of need. Those earning more can still qualify if documented monthly expenses exceed monthly income.10Commonwealth of Pennsylvania. Real Estate Tax Exemption The income screen makes Pennsylvania less predictable than Texas or Florida, where approval is automatic once disability status is confirmed.
Hawaii exempts totally disabled veterans from all property taxes on the primary residence except a minimum tax imposed by the county.11City and County of Honolulu. Totally Disabled Veterans Property taxes are administered at the county level, so terms vary across Hawaii’s four counties.
Best Options If You’re Not Rated 100 Percent
Most full exemptions require a 100 percent rating. If your rating is lower, a few states are still worth a hard look.
Illinois
Illinois uses a tiered system. Veterans rated 70 percent or more disabled receive a reduction of up to $250,000 from the equalized assessed value of their home, which zeroes out the tax on most residential properties in the state. Ratings of 50 to 69 percent get a $5,000 reduction; 30 to 49 percent gets $2,500.12Illinois General Assembly. 35 ILCS 200/15-169 – Standard Homestead Exemption for Veterans With Disabilities The 70-percent tier functions like a full exemption for the vast majority of Illinois homes.
Georgia
Georgia’s exemption is indexed annually to the maximum federal Specially Adapted Housing grant under 38 U.S.C. 2102. For 2026, that is $126,526.13Fulton County Assessor. 2026 Homestead Maximum for Disabled Veterans and Surviving Spouses Because Georgia assesses at 40 percent of fair market value, a home worth roughly $316,000 or less at market value is fully covered. Unremarried surviving spouses of service members killed in action receive the same indexed amount.
Alaska
Alaska exempts up to $150,000 of assessed value on a primary residence for veterans rated 50 percent or more disabled, with the disability incurred or aggravated in the line of duty and certified before January 1 of the tax year.14Matanuska-Susitna Borough. Senior Citizen/Disabled Veteran Property Tax Exemption No state income tax and no state sales tax amplify the benefit.
Oregon
Oregon deducts from assessed value for veterans with a rating of 40 percent or more. As of January 2026, the deduction is $27,092 or $32,512 depending on whether the disability is service-connected, and it increases by 3 percent each year.15Oregon Department of Revenue. Disabled Veteran or Surviving Spouse Property Tax Exemption The dollar figure is smaller than in other states, but the 40 percent threshold opens the door to more veterans.
Washington
Washington ties the exemption to household income rather than disability rating alone. Each county sets its own income threshold based on local median household income, and the relief scales with earnings.16Washington Department of Revenue. Property Tax Exemption for Seniors, People Retired Due to Disability, and Veterans With Disabilities Lower-income veterans in lower-cost counties get the largest reductions.
Surviving Spouse Portability as a Tiebreaker
If two states look equally attractive on the exemption itself, the surviving spouse rules are what separate them. Texas and Virginia let surviving spouses transfer a dollar-equivalent exemption to a new home. Michigan extends the exemption to any homestead the surviving spouse owns after the veteran’s death, including one bought later.5Michigan Legislature. Michigan Compiled Laws 211.7b – Exemption of Real Property Used and Owned as Homestead by Disabled Veteran or Surviving Spouse South Carolina lets the spouse claim the exemption immediately, even if the veteran never applied.4South Carolina Department of Revenue. Veterans – Learn More About SC Property Tax Exemptions Other states tie the exemption to the specific property where the veteran lived, so a spouse who downsizes or relocates can lose it. Portability is the feature to check.
Baseline Eligibility
Rules vary, but the core requirements are consistent:
- An honorable discharge or discharge under honorable conditions. A dishonorable discharge disqualifies you everywhere.10Commonwealth of Pennsylvania. Real Estate Tax Exemption
- A VA-rated disability that is service-connected. A non-service-connected disability, even at 100 percent, typically does not qualify.
- The property must be your primary residence. Investment properties, vacation homes, and commercial real estate are out.8State of New Jersey. 100% Disabled Veteran Property Tax Exemption
- You must hold a qualifying ownership interest. Co-ownership with someone other than a spouse is usually prorated to your share; community property with a spouse is treated as full ownership.
Adjust Your Escrow After the Exemption Is Approved
If your mortgage includes an escrow account for property taxes, approval of the exemption doesn’t automatically lower your monthly payment. The lender collects escrow based on the estimated tax bill and won’t recalculate unless notified. Once you have the updated tax bill showing the reduced amount, contact your servicer and request an escrow analysis. Federal law requires an annual review, but you can request one sooner, and if the analysis shows a surplus of $50 or more, the servicer must refund it within 30 days.17Consumer Financial Protection Bureau. 1024.17 – Escrow Accounts Your monthly payment should also drop going forward. Skip this step and you keep overpaying until the next scheduled review catches up.
If the county issues a refund for taxes already paid before the exemption took effect, that money may go to the mortgage company rather than to you, since the lender paid the bill from escrow. The lender should credit the funds back to your escrow account; verify by comparing your annual escrow statement against your Form 1098.