Maryland Disabled Veteran Dwelling Tax Exemption

Tax-Property Article section 7-208 is a full exemption from property tax on the dwelling house. The State Department of Assessments and Taxation says that covers state, county, and municipal tax. The house has to be the veteran's principal residence, and the veteran has to own it. The dwelling includes the lot or curtilage and structures needed to live there, such as a garage or utility shed. There is no income test on this exemption. The disability has to be one VA has determined is 100% service-connected, permanent, and total, and it cannot come from the veteran's own misconduct. SDAT also says an Attorney General opinion allows the exemption when the rating is under 100% if VA finds the veteran permanently unemployable. The application asks VA to certify a final rating of 100% permanent and total, or 100% permanently unemployable, with the decision date and the effective date. SDAT will not accept a VA summary of benefits letter. Send the rating decision. Also send the discharge certificate, usually the DD-214, and proof of Maryland residence, such as a Maryland driver license or the prior-year Maryland tax return. Apply at the local assessment office for the county where the house is. Veterans and surviving spouses may apply at any time. They do not have the September 1 deadline used for some other exemptions. A veteran who is about to buy can apply for the specific house before closing. A refund of state, county, and municipal tax is mandatory for a period when the exemption was authorized and not yet granted. The request has to be made in the three-year period that starts with the calendar year of the rating decision. Refunds do not go back before the 2018-2019 tax year. The effective date of the disability is what the refund is measured from, once the application is in time. An unremarried surviving spouse can qualify when the veteran received a 100% service-connected permanent and total rating before or after death. The rules differ if the veteran owned the house at death, if the spouse later acquired a house the veteran lived in, or if the spouse moves. A later marriage ends it. A divorce after that later marriage does not restore it. An annulment that voids the later marriage can. A surviving spouse of a service member who died in the line of duty has a separate application on the same statute. A disabled active-duty member can also qualify, with a physician or VA certification, and has to recertify active duty each year. That active-duty path is not the veteran exemption. Who counts as a veteran changed on July 1, 2026. Chapter 689 of 2026 (SB 194), applicable to taxable years beginning after June 30, 2026, rewrote the definition in Tax-Property section 7-208(a)(3). Before, a disabled veteran had to be "honorably discharged or released under honorable circumstances" from active military, naval, or air service. Now the veteran only has to be "a veteran", which State Government section 9-901 and General Provisions section 1-117 give the 38 U.S.C. 101 meaning, a discharge under conditions other than dishonorable, and space service is named alongside the others. A veteran with a general or other than honorable discharge who is a veteran for VA purposes and holds a 100% permanent rating now meets the statute. General Provisions section 1-109.1 separately treats as honorable, for every state veterans benefit, a discharge the Department of Veterans and Military Families finds eligible under the federal character of discharge rule in 38 C.F.R. 3.12. The same session's Chapter 647 (HB 842) reprinted section 7-208(a) with the old honorable-discharge words, "without amendments"; that act only added a local credit and does not undo Chapter 689, and the Code prints Chapter 689's text. Local credits for everyone else. Tax-Property section 9-265 lets Baltimore City, a county or a city give a disabled veteran a credit against the local tax: 50% of the local tax at a rating of 75% or more for a veteran who does not qualify for this exemption, or 25% at 50% to 74%. Since Chapters 916 and 917 of 2024 the credit covers a permanent rating of 50% or more and a nonpermanent 100% rating, and a local law can limit it to permanent ratings. Chapter 689 of 2026 removed the honorable-discharge test from section 9-265, and from Washington County's credit in section 9-323(g), on the same terms as this exemption: for taxable years beginning after June 30, 2026 the veteran only has to be a veteran. County laws and forms written before then still ask for an honorable discharge. Chapter 646 of 2026 (HB 1611) raised the income ceiling from $100,000 of federal adjusted gross income to $150,000 on an individual return and $300,000 on a joint return, for taxable years beginning after June 30, 2026. Section 9-258 lets a local government give a credit to a retired service member who is 65 or older, to a service member or veteran with a service-connected disability as the local law defines it, and to their unremarried surviving spouses. Section 9-267 allows a credit for the unremarried surviving spouse of a fallen service member who is not eligible for this exemption, and Chapter 647 of 2026 added section 9-267.1, which lets a local government give a credit to any surviving spouse who is not eligible for this exemption, on terms it sets. Each credit exists only where that jurisdiction has enacted it, and the amount, deadline and extra conditions are local. The county pages in this catalog say which county has enacted which.