Arizona Property Tax Exemption for Veterans with Disabilities

Arizona's veterans property tax exemption has a strange recent history, and five acts have amended the statute since March 2025. Which text applies depends on the tax year, and the version the Legislature's website serves is the one for tax year 2027. The old constitutional exemption required Arizona residency before entering service. Courts struck that condition down, and from 1990 the exemption was effectively dead. Proposition 130, approved on November 8, 2022, restored it to the constitution without the residency condition and left the Legislature to set the terms. The full exemption was created by the 2025 tax omnibus, Senate Bill 1749 (Laws 2025, chapter 247), signed June 27, 2025, not by House Bill 2672, whose Senate fact sheet this entry used to cite: House Bill 2672 never received a chapter number. It added ARS 42-11111(C): the property of a veteran whose service-connected disability rating is 100 percent is fully exempt, and a veteran rated below 100 percent, or with a nonservice-connected rating, gets $4,188 multiplied by the rating. Senate Bill 1122 (chapter 16 of 2025) had already indexed the assessment limit for widows and disabled persons. Tax year 2026. House Bill 2792 (Laws 2026, chapter 2), an emergency act signed February 12, 2026 and applying to tax years after December 31, 2025, narrowed the full exemption from "the property" to the veteran's primary residence, treated a home owned with a spouse as owned solely by the veteran, and moved the surviving spouse's continuation to the spouse's own primary residence until remarriage. For 2026 the full exemption needs a 100 percent schedular rating; the text does not mention individual unemployability. It also rewrote the income test to apply "to qualify for an exemption under this section", which on its words reaches veterans: household income from all sources, which leaves out veterans pensions and VA compensation that is outside adjusted gross income, may not exceed $34,901, or $41,870 with a child at home, as indexed. House Bill 2120 (chapter 82 of 2026, June 4, 2026) reprinted the same text and added a Social Security determination letter as proof of total and permanent disability. Tax year 2027 and later. The 2026 tax omnibus, House Bill 4168 (Laws 2026, chapter 140), signed June 13, 2026, rewrote the section again for tax years after December 31, 2026, and it is this text the ARS page now shows. The primary residence of a veteran rated 100 percent or with total disability based on individual unemployability is fully exempt. The income limit applies only to the widow and disability exemption in subsection E, not to veterans. A surviving spouse keeps the full exemption on the spouse's primary residence under new subsection F, or the rating-scaled amount under subsection G, proving the veteran's rating to the assessor. A move needs a transfer form filed within sixty days. The exemptions in subsections C to G are exclusive of each other. Three acts of one session amended the same section. Chapter 2 and chapter 82 carry the tax year 2026 text; chapter 140, the last signed, controls from 2027. Below 100 percent the exemption is modest: $4,188 of assessed value in the statute, indexed each year by the GDP price deflator, times the rating, so a veteran rated 40 percent gets about 40 percent of that figure. Ask the county assessor for the published amounts for the year you are claiming. Claim it by filing an affidavit with the county assessor under ARS 42-11152. For tax year 2026, recalculate income each year and tell the assessor in writing of anything that disqualifies you; from 2027 that duty applies only to the subsection E exemption.