Topic:
HANDICAPPED; PROPERTY TAX; TAX EXEMPTIONS; VETERANS' AFFAIRS;
Location:
TAX EXEMPTIONS - VETERANS;

OLR Research Report


November 21, 2008

 

2008-R-0627

VETERANS WITH DISABILITIES AND PROPERTY TAX EXEMPTIONS

By: Veronica Rose, Principal Analyst

You want to know what property tax exemptions are available under state law to veterans with disabilities.

SUMMARY

Veterans rated by the U.S. Veterans Administration (VA) as having a disability are eligible for property tax exemptions over and above those available to other veterans, provided they meet specified criteria. The exemption amount depends on the severity of the disability and other factors, including the veteran's income.

Veterans with a VA disability rating of 10% or more are eligible for exemptions ranging from a minimum of $1,500 to $3,000, irrespective of the cause of the disability. Veterans with a severe, service-related disability rating are eligible for exemptions ranging from a minimum of $5,000 to $10,000. Veterans in the latter category may claim both exemptions, provided they meet the criteria for the first exemption.

Towns may have to increase the amounts of these exemptions when they implement a revaluation (CGS 12-8162g). As a result, most of the towns in the state provide exemptions to disabled veterans in amounts greater than those specified in statute.

Veterans receiving any of the above exemptions qualify for an additional state-mandated exemption. The additional amount depends on the veteran's income and the amount of the exemption the veteran is receiving under the above provisions.

The law allows towns to completely exempt from property taxes a veteran's house and house lot acquired or modified under a federal financial aid program for specially adapted housing for veterans. (A specially adapted home is one outfitted to make it suitable for someone who has lost his limbs or eyesight.)

The law allows a town to grant an exemption, in an amount it determines, on one motor vehicle owned by a veteran who qualifies for an exemption for a VA disability or severe, service-connected disability, if the vehicle is equipped to accommodate the veteran's disability.

EXEMPTIONS FOR VETERANS WITH DISABILITIES

The law provides property tax exemptions to veterans with a VA-rated disability of at least 10% (CGS 12-81(20)). (The disability does not have to be service-related, and unlike the exemptions for non-disabled veterans, the veteran does not have to have served during wartime to qualify.)

The disability ratings and minimum exemption amounts are as follows:

Disability Rating

Exemption Amount

10%-25%

$1,500

26%-50%

2,000

51%-75%

2,500

76%-100%

3,000

At least 10% if age 65 or older

3,000

The exemption increases automatically when the veteran reaches age 65. Even if the veteran's disability is only 10%, the exemption increases to $3,000, as of the October 1 after the veteran turns 65.

A veteran applying for this exemption must, as of the October 1 assessment date:

1. live in Connecticut;

2. either own, hold life use in, or be the beneficiary of a trust estate for the property;

3. provide acceptable proof of service to the clerk of the town of residence (a DD 214 form or a similar document from a branch of the U.S. armed forces or federal government or (b) a sworn statement of his service, which must be supported by the affidavits of two disinterested people);

4. have at least a 10% disability; and

5. unless age 65 or older or rated 100% disabled, provide a VA disability rating slip annually to the assessor.

In the case of a married couple, either spouse may own, hold life use in, or be the beneficiary of a trust for the property. A veteran's surviving spouse who remains unmarried is entitled to the property tax exemption for which the veteran qualified.

EXEMPTIONS FOR VETERANS WITH SEVERE SERVICE-CONNECTED DISABILITIES

Veterans with severe, service-connected disabilities are eligible for a state-mandated property tax exemption under CGS 12-81(21). The minimum exemption amount is $5,000 for the loss of the use of an arm or a leg or $10,000 for:

1. permanent loss of use of both legs or permanent paralysis of both legs and lower parts of the body;

2. permanent paralysis of one leg and one arm on either side of the body resulting from injury of the spinal cord, skeletal structure, or brain or from spinal cord disease;

3. amputation of both arms, both legs, both hands, or both feet or a combination of a hand and a foot; or

4. total blindness.

To qualify for an exemption, the disability must result directly from a service-related debilitating injury or disease, and not from a veteran's own misconduct. The veteran must, as of the October 1 assessment date:

1 be a U.S. citizen and state resident;

2 own, hold life use in, or be the beneficiary of a trust estate for the property on which the exemption is being claimed;

3 live in the dwelling for which the exemption is being claimed (which may be a residential dwelling or leased land);

4 provide one of the following forms of proof to the town clerk in the town of residence: the original or a certified copy of a DD 214 form or similar document from a branch of the U.S. armed forces or federal government authority or (b) a sworn statement of the service, which must be supported by affidavits from two disinterested people; and

5 provide (one time only) a VA certificate describing the disability to the assessor of the town of residence.

The exemption can be applied only to a veteran's residence (the dwelling and lot). If the residence is not a single-family home, the exemption can be applied only to the part of the building and lot the veteran occupies. In the case of a married couple, either spouse may own, hold life use in, or be the beneficiary of a trust with respect to the property. But the property must be the veteran's domicile or permanent residence.

Although a veteran is normally eligible for only one veteran's exemption, a severely, service-disabled veteran is concurrently eligible for both this exemption and the exemption available to disabled veterans under CGS 12-81(20), provided the veteran meets all the requirements.

Local-Option Exemption

A federal program provides financial aid to eligible veterans with permanent and total service-connected disabilities to acquire or modify suitable housing and land to accommodate a veteran's disabilities (38 USC 2101). State law allows a town, by vote of its legislative body, to completely exempt from property taxes any dwelling house acquired or, as of October 1, 1998, modified under this federal program to accommodate a veteran's special needs (CGS 12-81(21)(C)).

Surviving Spouse

The local-option exemption and exemption for a severely disabled veteran remain in effect as long as the veteran, or surviving spouse, owns and occupies (as a permanent residence) the property to which the exemption applies. If the surviving spouse remarries, the exemption ends. But the surviving spouse may reclaim it if the marriage is terminated (by death, dissolution, or annulment).

ADDITIONAL EXEMPTION

State-Mandated

CGS 12-81g(a) and (b) require towns to give veterans, including veterans with VA-rated disabilities, an additional exemption equal to (1) half what the veteran is receiving if the veteran's income is above a certain threshold or (2) double what the veteran receives if the veteran's income is below a certain threshold. For example, a disabled, income-eligible veteran receiving a $3,000 exemption under CGS 12-81(20) qualifies for an additional $6,000. The total exemption is therefore $9,000. The current income guidelines are $29,800 for an unmarried veteran and $36,500 for a married veteran. There is an annual adjustment to these income limits to reflect the Social Security Administration's cost of living adjustment.

Veterans who have a VA disability rating of 100% must have adjusted gross income of $18,000 or less if unmarried and $21,000 or less if married. A veteran's disability payment does not count toward income.

Veterans denied the state-mandated additional exemption may appeal to the Office of Policy and Management (OPM) secretary in writing; they may appeal OPM's decision to Superior Court (CGS 12-81g(e)).

LOCAL-OPTION EXEMPTION ON MOTOR VEHICLES

The law allows a town to grant an exemption, in an amount it determines, on one motor vehicle owned by a veteran who qualifies for an exemption for a disability under CGS 12-81(20) or a severe service-connected disability under CGS 12-81(21). The vehicle must be specially equipped to accommodate the veteran's disability (CGS 12-81h).

VR:ts