Real Estate Tax Exemption FAQs
Real Estate Tax Exemptions (RETX) are for eligible disabled veterans for their primary residence. The tax exemptions include township taxes, county taxes, and school district taxes. Below are some questions we're asked often about eligibility, wartime and armed conflict eras, taxes, income, and the process.
Are Surviving Spouses eligible?
Yes. Surviving Spouses are eligible provided the deceased veteran would have met all eligibility requirements, including being rated at 100% P&T during their lifetime. For these applications, we would also need a marriage certificate and a death certificate.
What if the surviving spouse moves and the veteran, now deceased never lived in that house?
The surviving spouse is still eligible for this benefit understanding the deed would only be in the surviving spouse’s name.
If the veteran or surviving spouse goes into a long-term care facility, are they still eligible?
That depends… long-term care or rehab facility placement is usually not forever, since persons sometimes return home for hospice. Placement in a facility does not mean the primary residence has changed.
If the veteran dies, does the spouse need to immediately file?
No, just wait until it comes up for renewal. Remember, if the death is service-connected or if the veteran was rated at 100% for more than ten years, the spouse may be eligible for a Dependent Indemnity Compensation Claim.
Who decides if I am eligible?
The PA Department of Military and Veteran Affairs adjudicates the claim after our office processes the application.
Can I appeal their decision if I’m not eligible?
For matters other than income-related, you can appeal with the County Tax Assessment Board. Our office may testify on your behalf, if needed.
Why does my disability rating need to be “Permanent and Total”?
The exemption is valid for 5 years. If your disability rating is not P&T, it can be re-rated during that time. 100% Permanent and Total (A P&T must be on your award letter) means the severity of the disability is expected to continue for the remainder of the veteran's life, with no improvement. Permanent & Total ratings cannot be reduced.
If I am not 100% but paid at 100% due to “Unemployability”, can I get the exemption?
Yes. You are eligible.
Does the home I am applying for an exemption need to be my primary residence? What about if the veteran or eligible surviving spouse is in a nursing home or rehabilitative care?
The home needs to be a primary residence. If the veteran or eligible surviving spouse is in a facility, that home can still be considered their residence….their health may improve.
Does the veteran’s name need to be on the deed, can anyone else be on the deed?
Yes, the veteran’s name needs to be on the deed but a spouse is permitted. Dependents are not allowed. Trusts and LLCs are usually not allowed unless the persons who are a part of the trust or LLC are only the Veteran and spouse.
What if I don’t own the home yet?
If you are shopping for a home, you cannot apply for the exemption to avoid Escrow costs. You cannot apply until the deed is recorded.
What are the Wartime Eras?
What does Armed Conflict mean?
An armed conflict would be events like Grenada (1983), Operation Observant Compass (Uganda, 2011), Operation Ocean Shield (Piracy, 2009), Operation Eagle Claw (Iran, 1980). Your service does not just have to be during that period, you must also have directly participated and this should be on your DD-214 and/or you would have received an award such as the Armed Forces Medal or an Expeditionary Medal.
What if I served during peacetime, for example between Korea and Vietnam or between Vietnam and Desert Storm?
The PA constitution says you must have served during Wartime or Armed Conflict. An Armed Forces Service Medal or Expeditionary medal for yourself (or a ship you served on) would assist with this part of the eligibility for Armed Conflict.
What if the veteran killed in action?
Unfortunately, the veteran has to be rated during their lifetime and you would not be eligible.
What taxes am I exempt from?
Township Taxes, County Taxes, and School District Taxes
Do I have to file taxes to prove income?
No. If you collect only SSR and VA Disability Compensation and are exempt from filing taxes you only need to submit the SSR and VA Award letter to prove income.
What tax year must I use?
The most current tax year unless you have filed for an extension, which we would need to see for proof.
If my application is stamped in April, and later approved do I still need to pay taxes?
Yes. You still need to pay taxes until you receive a review letter from the PA DMVA.
If my application is stamped in April, approved in May, and on tax rolls in July, can I get a refund for April to July?
Yes. However, please talk with your tax collector.
Does the income threshold ever change? If so, when?
Yes. The income threshold changes every two years, but sometimes every year.
What happens if I am over the income threshold?
You are not eligible.
Do IRA disbursements and taking money from a Vanguard account qualify as income towards the $95K threshold even if it was a one-time thing?
Yes. It counts as income; however, if it was a one-time emergency thing, like a roof, it can be appealed at the state level. For “renewal years” the fourth year of the exemption, we highly recommend carefully monitoring these disbursements to stay within the threshold.
Does my spouse’s income count towards the income threshold?
No, it does not, but we need visibility on what you make and what your spouse makes. Shared accounts must be figured in calculating the income threshold.
Do you need my entire tax package?
Yes, to be very clear we need your absolute entire tax package to determine the income threshold.
Why does my VA disability compensation count toward the income eligibility limit when I don’t pay taxes on it?
There is NO difference between taxable income and income for the purposes of this program. This program accounts for all income.
I have a one-time disbursement from an IRA/retirement account to make a home improvement (e.g. update a bathroom). Does that money count as income for the income eligibility threshold?
Generally, yes it does count. So maybe hold off on taking large sums of money out the year before you apply or renew. That being said, there are ways to appeal. For instance, if the money was taken out to outfit a vehicle or home for a wheelchair for a handicapped veteran, this would be a valid reason to appeal.
Can I file the application myself?
No. You must go through the County Veterans Affairs Office.
How long is the exemption valid?
Five years. It needs to be renewed which is primarily based on income.
What do I do between when I apply and when I get approval letter?
Continue to pay your taxes until you get your approval letter.
Can I call your office for a status update on my application?
No. Once our office sends your application to the state, we are not notified of any application status. We also cannot contact the state to ask for an update on your behalf. The process can take as long as 90 days. You may call our office to check on the application after the 90 days have passed.
When I get my approval letter, should I call your office?
No. Follow the instructions on the letter and give copies to your township tax collector and school district tax collector. If taxes are paid through a mortgage, send a copy to your mortgage company.
What if I am not approved?
You may appeal at the Montgomery County Tax Assessor’s Appeal Board. Our office can help you appeal.