Forward Observer — Understanding Veterans Real Estate Tax Exemptions in PA and NJ

LVMAC Poster Art 2005Real Estate tax exemptions for veterans have come up more than once at veterans group meeting. Confusion often reigns. Word of mouth frequently leads to misunderstandings.  Perhaps the worst part is surviving spouses are often forgotten – to include the surviving spouses of a servicemembers killed in action. This article is an attempt to clarify the situation for our members who live in Pennsylvania and that other country, New Jersey.  While it is beyond the scope of this article to determine with certainty any local ordinances regarding exemptions exist (none are currently known), the existing laws in both states are discussed.

First, the belief that real estate tax exemptions for a disabled veteran are federal law is not true.  Any real estate tax exemption, waiver or reduction (hereafter, called “exemption”) is the result of a local ordinance or state law.

Second, the statement that the veteran must have a 100% disability rating from the VA is essentially true in practice, but it is only part of the story.   Both states require the rating to be a permanent one and each have constructed their laws in such a way as make a 100% rating only one of the possible conditions – perhaps to protect the individual from potential peculiarities, vagaries and changes in the VA rating system or to better express their intents.  Also, both states add additional eligibility requirements beyond having a disability rating.1

New Jersey

How to Refer to It: Disabled Veterans’ Property Tax Exemption

Citation: NJSA (statute) 54:4-3:30 et. seq. , NJAC (admin code or regulation) 18:28 and Dept of Treasury website page on the subject.

Synopsis (for more details and provisions read the citations):

Property Covered: Applies only to the principal residence and the lot on which that residence is situated. There is no acreage limit.

Residency and Citizenship Requirement: Need not be a U.S. citizen, but must be a legal citizen or resident of the New Jersey.

Character of Discharge: Veterans must be honorably discharged or released under honorable circumstances from active service2, in time of war (see application form or the administrative code for the periods), in any branch of the U.S. Armed Forces (includes Coast Guard).

Income Situation: Not a factor

Disabilities Defined: The VA has certified the veteran has a service-connected disability as follows:

  •  from paraplegia, sarcoidosis, osteochondritis resulting in permanent loss of the use of both legs, or permanent paralysis of both legs and lower parts of the body, or
  •  from hemiplegia and has permanent paralysis of one leg and one arm or either side of the body, resulting from injury to the spinal cord, skeletal structure, or brain or from disease of the spinal cord not resulting from any form of syphilis; or
  • from total blindness; or
  •  from amputation of both arms or both legs, or both hands or both feet, or the combination of a hand and a foot; or
  •  from other service-connected disability rated to be a total or 100% permanent disability, and not so evaluated solely because of hospitalization or surgery and recuperation, sustained through enemy action, or accident, or resulting from disease contracted while in such active service.
  • Note: The exemption does not apply to paraplegia or hemiplegia resulting from locomotor ataxia or other forms of syphilis of the central nervous system, or from chronic alcoholism, or to include other forms of disease resulting from the veteran’s own misconduct which may produce signs and symptoms similar to those resulting from paraplegia, osteochondritis, or hemiplegia.

Surviving Spouse Provisions: Upon proper claim being made, entitlement extends to the unmarried, resident, surviving spouses of such entitled, disabled war veterans, regardless of whether or not the spouse had laid claim to the entitlement. Unmarried, resident, surviving spouses of servicepersons who died on wartime active duty have the same entitlement.

Refund for Prior Years: This is up to the municipality. However, if the claim is acknowledged at some point within a tax year, the balance of the year is not taxable and the tax prorated.

Periodic Reviews: However, the assessor may, at any time, request additional information in support of claimant’s continued eligibility for the exemption.

Application Procedure: Contact your municipal assessor.

Application Form(s) (useful for determining documentation and other criteria): Click here.

Pennsylvania

How to Refer to It: Disabled Veterans’ Real Estate Tax Exemption

Citation: PaCS (statute) 51:89 , PA Code 43:5 and DMVA Webpage

Synopsis:

Property Covered: All real estate taxes levied upon any building, including the land upon which it stands, occupied and owned by that person as a principal dwelling. The administrative code has effectively limited this to five acres if no appeal is made. The law states the need for the exemption from the payment of real estate taxes is determined by State Veterans’ Commission subject restraints by law.

Residency and Citizenship Requirement: Need not be a U.S. citizen, but must be a legal resident of the Pennsylvania.

Character of Discharge: Veterans must be honorably discharged or released under honorable circumstances from the armed forces of the United States for service in any war or armed conflict in which this nation was engaged.

Income Situation: Must prove financial need. A rebuttable presumption of need level for the applicant is established by the State Veterans Commission (a board of veterans and veterans organizations), as further guided by the legislation on how to set increases. What does this mean? The State Veterans Commission will not contest entitlement, assuming the other conditions for eligibility are met, if the applicant’s annual income (not total household income) is $87,212 or less for 2015 and the applicant is asking for no more than 5 acres of land to be included. Above the income or land limit, the game changes as to what family income and assets are included.

Disabilities Defined: As a result of such military service, that person is blind or paraplegic or has sustained the loss of two or more limbs, or has a service-connected disability declared by the VA be a total or 100% permanent disability. The Department of Military and Veterans Affairs has further defined being blind as visual acuity of three-sixtieths or ten two-hundredths, or less normal vision; and paraplegia as the bilateral paralysis of the upper or lower extremities of the body.

Surviving Spouse Provisions: The exemption is extended to the unmarried surviving spouse upon the death of the eligible veteran provided the State Veterans’ Commission determines that such spouse is in need of an exemption. No provision for the spouses of those killed in action exists, as in New Jersey law.

Refund for Prior Years: None

Periodic Reviews: Every five years.

Application Procedure: See your County Director of Veterans Affairs.

Application Form(s) (useful for determining documentation required and other criteria): No official, online forms from the state government are available to review.

  1. MA-VA 41 (Information Needed by County Tax Assessment Office for Disabled Veterans Property Tax Exemption).
  2. MA-VA 40, Veteran only; or MA-VA 40ss, Surviving Spouse only, (Application for Determination of Need for Exemption from Certain Real Property Taxes).

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1.   When it comes to eligibility, sometimes the statutes are more specific or correct than the administrative codes that regulate their implementation. This is good to know, for where interpretation is involved, it has been known for an administrative code to be in error.

2.  The term “active service” means service on active duty or full-time National Guard duty.

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RJH
As of 21 August 2015

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