Does Vermont have a Property Tax Reduction for Veterans?
Yes for some disabled veterans and families. The following are eligible for the exemption:
- Veterans receiving Disability Compensation at a rating of 50% or higher
- Veterans receiving Non-Service Connected Pension (also called Improved Pension)
- Veterans collecting permanent military retirement pay for a medical military retirement
- Surviving spouses of veterans who had received the exemption (surviving spouses may also be eligible for Dependency and Indemnity Compensation or Death Pension) Property Tax Application 2024.pdf
The exemption level varies from town to town. State law mandates a minimum $10,000 exemption, although towns are given the option of increasing the exemption to $40,000. The exemption reduces the appraised value of the home prior to the assessment of taxes. For example: An eligible veteran lives in a home valued at $200,000. The veteran’s town provides a $20,000 exemption. The veteran’s home will be taxed at $180,000. Veterans who would like to have their town increase their exemption must go through their town’s local procedures for having a measure placed on an election ballot for town voters to consider.
The exemption only applies to homes that are owned by the veteran or survivor; and is the primary residence. Veterans or survivors who rent their homes can not pass this exemption on to their landlord.
To receive the exemption, the veteran must provide proof of eligibility to the Vermont Office of Veterans Affairs. Most veterans will have to provide proof of eligibility every year before May 1st. Veterans who are determined to be totally and permanently disabled only have to provide proof of eligibility the first year they use the benefit for a home (if they move to a new home in a different town, they will have to provide proof of eligibility again). They also must provide proof of eligibility by May 1st.
Proof of eligibility is provided by the U.S. Department of Veterans Affairs (VA). Our recommendation is to call the VA no later than April 1st to request this documentation. The proof of eligibility may also be obtained through the VA online.
- U.S. Department of Veterans Affairs Benefits - (800) 827-1000
Does Vermont Exempt Military Retirement Pay from State Income Tax?
Vermont’s Governor signed Act 138 late in the Spring of 2022 that exempts a portion of military retirement pay. It exempts the first $10,000, but is subjected to an Annual Gross Income cap of $50,000 (single) and $65,000 (joint). It is also subject to choosing a Social Security tax exemption or Military Retirement pay tax exemption when someone reaches Social Security eligibility age.
Does Vermont Waive Department of Motor Vehicle Fees to Veterans?
Yes for specific disabled veterans. The exemptions are only provided to disabled veterans who have had their vehicle modified to accommodate their disability and this accommodation was paid for by the U.S. Department of Veterans Affairs. Veterans who meet these criteria are exempt from vehicle sales tax, registration fees, and license fees. All other veterans are not exempt, including veterans who may be 100% disabled. For more information, contact the Vermont Department of Motor Vehicles.
- Department of Motor Vehicles - (802) 828-2000