Do Military Members Pay Property Tax?

Posted by Lauren Schneider on Wednesday, January 29th, 2020 at 11:14am.

Do Military Members Pay Property Tax?Military service members are offered a number of protections to give them an edge in the housing market. Not only do VA loans offer affordable interest rates, many don't require a down payment. The question becomes just how far those benefits extend. Learn more about how property taxes work and what veterans and active-members can expect.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

State Laws Differ

Like many real estate laws, the property tax benefits will differ depending on the state in which the property is located. However, there is some degree of protection for both veterans and active military by protecting its members from high taxes. This perk comes by lowering the amount of the home, which in turn will lower the amount of property taxes owed.

In addition, the US military has a Basic Allowance for Housing (BAH) that can be used in various ways. Some will use it to pay for rental expenses while others will use it to pay for a home. If owners get into financial trouble, they can call on the funds to help protect them from foreclosure.

While there are benefits for military members, it can be complicated to anticipate the percentages that each individual homeowner will pay. In addition to each state setting its own standards for exemptions, the definitions of a veteran will vary by state and may be based on any of the following factors:

  • Time served
  • Whether the individual served in wartime
  • If the individual was disabled
  • The type/extent of disability
  • Medal status during time of service

Different states also have different definitions of disabled and will evaluate each individual's case based on a separate set of criteria. Other states will base tax exemption on the gross annual household income, whether the property has been homesteaded, and if the military member served in a combat zone. Some spouses may also be eligible for military-based exemptions, depending on their individual circumstances.

Finding Help

To learn more about state laws and the definitions of eligibility, it's best for military members to reach out to their local VA chapter or local government chamber. The property tax rules for military members and veterans are subject to change, so it may take some research to ensure each homeowner gets the benefits they're eligible for. Homeowners may also need to reach out to a tax professional every year for more information on adjustments made to the state tax code.

When to Invoke BAH Benefits

Members are generally eligible for protections against foreclosure if their service has interfered with their ability to pay property taxes. In some cases, the BHA may step in to pay for certain expenses. In other cases, the courts may order a halt on a property tax foreclosure until the member's service time is completed.

Depending on the situation, court officials may extend the benefit for up to six months after the member has completed their service. But even if the owner isn't in arrears due to their time in the military, the Servicemember's Civil Relief Act (SCRA) generally prevents excessive fines and penalties taken against a military member due to their unpaid tax balance.

Military members can take advantage of a number of protections available to them, including property tax exemptions. The only catch is that these benefits are not necessarily extended to every person equally throughout the US. It may take a little more effort to ensure that each Powers homeowner receives their benefits based on state laws.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

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