May 23, 2024

New Tax Exemption for Disabled Veterans

Memorial Day is approaching, that day when Americans remember the more than one million citizens who have fought and died in combat since the Civil War.

There are many things that the Connecticut General Assembly has done over the years to honor our military veterans, from tuition waivers at state universities to holding on to your job in state or local government if you’re deployed. Now, as of a few weeks ago, you can add one more benefit: no more property tax payments for fully disabled veterans.

On May 7, the state Senate gave final and unanimous approval to a new state law that creates a new property tax exemption for veterans who have a permanent and total disability rating from the U.S. Department of Veterans Affairs.

Beginning on October 1 with the 2024 property tax assessment year (which is first applicable to tax bills due on July 1, 2025), the new law requires cities and towns to fully exempt the primary residence or motor vehicle for each of these veterans. To qualify, veterans must file for the exemption with their town assessor; the exemption can also be transferred to a deceased veteran’s surviving spouse or minor child.

How many veterans will this affect in Connecticut? In a state with more than 131,000 military veterans (most of them Vietnam-era veterans or veterans over the age of 75), it’s estimated that about 1,200 are fully disabled. That’s less than 1% of all veterans, and just a tiny fraction of Connecticut’s 3.6 million residents.

How much will it cost? The estimated loss of disabled veterans’ property taxes to all 169 Connecticut cities and towns totals less than $5 million.

“The concept of sacrifice for one’s country needs to be remembered and honored. One of the many ways we can do this for our veterans is to remove the burden of property taxes from veterans who are totally disabled,” said state Senator Cathy Osten (D-Sprague), a U.S. Army veteran and American Legion Post commander who lobbied for many years to pass this new law. “Historically, over a century ago, Connecticut did much more for its veterans when it came to property taxes. Since then, we haven’t really come close to keeping up with those levels of tax breaks. This bill makes some headway for permanently disabled veterans. It’s a good first step, but the work honoring our veterans will continue.”

“Our veterans who made sacrifices for our country deserve continued support, and this bill will help relieve financial pressures that negatively impact their lives,” said state Senator Martha Marx (D-New London), who is Senate Chair of the Veterans and Military Affairs Committee. “I’m proud that my colleagues and I were able to move this important aid forward.”

Connecticut’s history of property tax breaks for veterans’ dates back to just after the Civil War, when veterans were given a flat-rate exemption on their home values when home values were much less than they are today; the effect was essentially a full exemption on paying property taxes. But that exemption has remained basically unchanged for the past 100+ years even as property values have skyrocketed.

Connecticut cities and towns are already required to provide various property exemptions to veterans based on their wartime service, retirement, and qualifying disabilities. But those exemptions vary widely, and are relatively modest. In 2022, the state Office of Policy and Management estimates Connecticut towns provided a total of 93,400 tax exemptions to veterans and their family members saving them about $19 million in property taxes, or about $203 per-person.

The new property tax exemption is projected to save fully disabled veterans an average of $4,053 per-person in local property tax payments.

Posted by Lawrence Cook