How a Rating Becomes Money
Most state programs read your VA disability rating letter and convert the percentage into one of three things: a fixed amount of assessed value exempted, a percentage of value or of the bill removed, or — at the top of the scale — the whole bill.
The fixed-amount model is the most common at lower ratings and the most disappointing in practice. A $5,000 exemption against assessed value in a county with a 1.2% effective rate is worth $60 a year. The full exemptions at the top are a different order of magnitude: on a $350,000 home in a 1.8% county, a total exemption is worth about $6,300 every year, which over a 25-year retirement is well past $150,000.
That asymmetry is why the difference between a 90% rating and a 100% rating, or between 100% schedular and 100% permanent and total, is worth taking seriously.
The Graduated Model, Using Texas
Texas publishes the clearest ladder in the country, and several states copy its shape:
| VA disability rating | Exemption off assessed value |
|---|---|
| 10-29% | $5,000 |
| 30-49% | $7,500 |
| 50-69% | $10,000 |
| 70-99% | $12,000 |
| 100%, or individual unemployability | Total exemption on the residence homestead |
Note the cliff. Everything below 100% is worth between about $60 and $220 a year in most Texas counties. At 100% the benefit jumps to the entire bill. This is typical: the graduated tiers are modest, and the real money is concentrated at the top rating.
Texas veterans should also claim the ordinary Texas homestead exemption alongside this, and, if the assessment itself looks wrong, the exemption does not stop you protesting the value.
What the Major States Do at a Total Rating
| State | At a total service-connected disability | Worth knowing |
|---|---|---|
| Texas | Full exemption | Unemployability counts; graduated tiers below 100% |
| Florida | Full exemption | $5,000 at 10%+; separate discount for combat-disabled veterans 65+ equal to the rating percentage |
| Virginia | Full exemption | Constitutional; continues for surviving spouses |
| New Jersey | Full exemption | Plus a $250 annual deduction for honourably discharged veterans generally |
| Michigan | Full exemption | Unemployability counts; re-filed annually in many townships |
| Illinois | Full exemption at 70%+ | Graduated below: reductions in equalised assessed value at 30-49% and 50-69% |
| Oklahoma | Full exemption | Requires permanent and total |
| South Carolina | Full exemption | Applies to the dwelling and a limited amount of land |
| Maryland | Full exemption | Requires permanent and total |
| California | Capped exemption | A set amount of assessed value, higher for low-income claimants; both figures indexed annually. Not a full exemption |
| Colorado | Partial | A share of the first tranche of value, for permanent and total ratings |
| New York | Percentage reduction | Alternative veterans exemption: a base percentage for wartime service, more for a combat zone, more again scaled to the rating, all subject to caps each locality sets |
| Pennsylvania | Full exemption, need-based | Requires total disability and financial need as determined by the state |
| New Hampshire | Credit against the bill | Amount set locally; a separate, larger credit for certain total disabilities |
Treat this as a map, not the fine print. Legislatures adjust these programs most years, several states cap the exempt acreage or value, and a few add income tests. Confirm your own state with the county assessor or the state department of veterans affairs before you count on a number.
The Two Technicalities That Decide Borderline Cases
100% is not always the same as permanent and total
A number of states — Oklahoma and Maryland among them — require the disability to be rated total and permanent. A 100% rating that the VA has scheduled for future re-examination is 100%, but it is not necessarily permanent, and an assessor reading the letter closely can deny on exactly that basis.
If you are rated 100% without a permanence finding and your state requires one, that is a VA question before it is a tax question. The rating decision letter language is what the assessor reads, so get a copy that states the position clearly.
Individual unemployability
TDIU pays at the 100% rate without a 100% schedular rating. Whether it qualifies for a property tax exemption is entirely state-dependent. Texas and Michigan count it. Others require a schedular 100% and will refuse TDIU. This is the most common reason a veteran who "has 100%" gets a denial letter, and it is worth asking about explicitly before you file rather than after.
Surviving Spouses
Most states that grant a full exemption to a disabled veteran let the surviving spouse keep it, and several extend it to spouses of service members who died on active duty even where no disability rating existed. The usual conditions are that the spouse does not remarry and continues to occupy the home; some states let the benefit move with the spouse to a new home, others tie it to the original property.
This is among the most commonly missed benefits in the entire property tax system, because the veteran was the one who dealt with the assessor and the exemption quietly lapses at exactly the moment the household can least afford it. If you are a surviving spouse, ask — even if years have passed. See also property tax exemptions for widows and surviving spouses.
Specially Adapted Housing
Veterans who received a VA Specially Adapted Housing grant qualify for additional or alternative exemptions in a number of states, sometimes on terms better than the standard disability exemption. If a grant paid for adaptations to your home, mention it specifically when you apply — it is a separate eligibility route and assessors will not infer it.
What to Do With This
- Get your VA rating decision letter, the current one, showing the percentage and any permanence finding.
- Call your county assessor — not the state, not the VA — and ask what your rating qualifies for in that county, and whether TDIU or permanence rules apply.
- Ask what else stacks: homestead, senior, and any local veteran credit.
- Ask about retroactivity if your rating was granted with a backdated effective date. Some states will refund; you have to raise it.
- File before the deadline, which in most states falls in the first quarter of the year.
The step-by-step version is in how to apply for a veterans property tax exemption.
General information, not legal or tax advice. Rating thresholds, caps and eligibility rules are state-specific and change frequently — confirm with your county assessor or state department of veterans affairs.