Property Tax Exemptions for America’s Servicemen and Women

August 19, 2014 – If you served in the US Army, Navy, Marines, Air force, or Coast Guard then you may be entitled to a property tax exemption in New York State. There are three property tax exemptions available to veterans.

  • The Alternative Veterans’ exemption
  • The Cold War Veterans’ exemption, and
  • The Eligible funds exemption

Each option reduces your county and municipal taxes; for those eligible for the Alternative Veterans’ exemption school taxes will also be reduced.

The Alternative Veterans’ exemption is available on a veteran’s primary residence to veterans who served during a period of war or received an expeditionary medal. A period of war is defined as anyone that served in World War II, the Korean War, the Vietnam War, and the Persian Gulf Conflict. The tax benefit reduces the assessed value of real property by 15% before the tax rate is applied. An additional 10% reduction is also available for veterans who served in a combat zone. Additional reductions apply for disabled veterans equal to one-half of their service-connected disability rating. Note, each of these reductions is subject to a maximum limit set by the local community.

The Cold War Veterans’ exemption, available on a veteran’s primary residence to those that served during the cold war period,  is a 10-15% reduction of the assessed value of the property. Additional reductions apply for disabled veterans equal to one-half of their service-connected disability rating. The exemption is limited to 10 years.

The third Veteran benefit is the Eligible funds exemption. This exemption reduces the assessed value of property purchased up to a maximum of $5,000 by using any of the following eligible funds for the purchase:

  • Veteran pension
  • Bonus or insurance monies (including dividends or refunds from such insurance)
  • Compensation for being a prisoner of war
  • Mustering-out pay

The exemption is still available even if you move to another house provided you use the proceeds of the sale to purchase the new home. A veteran can switch from the eligible funds exemption to the alternative exemption if it becomes available in their community. However, unless you meet one of two exceptions, you usually cannot revert back to the old exemption.

In order to claim any of these tax exemptions a veteran must show appropriate documentation.  Examples are Form DD-214, which is received upon separation of service, discharge papers, or a copy of their military record. The applicant must file RP-458-a, RP-458-b, or the RP-458 for the Alternative, Cold War, and Eligible funds exemption, respectively. The deadline for applying for these benefits is the taxable status date, usually March 1st. You can find your community’s taxable status date by visiting http://orpts.tax.ny.gov/munipro.

Please contact your Dopkins Tax advisor for more information.

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Dopkins Tax Advisory Group

Our more than 25 tax professionals include specialists who are proactive, strategic thinkers who work to maximize your cash flow. In addition to cash flow considerations, we also believe that tax planning is most effective when it is integrated with, and fully supports, your business plan and personal goals. Our approach to tax planning will help you better understand the tax implications of any proposed course of action, and together we can make the right decisions for your business. For more information, contact Robert Pollock, CPA at rpollock@dopkins.com.

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