New Mexico Disabled Veteran Property Tax Exemption, Proportional to the Rating

This is the most valuable state benefit in New Mexico for a disabled veteran who owns a home, and it changed completely in 2026. What it is now. Section 7-37-5.1, subsection B: the property of a disabled veteran "is exempt from property taxation in an amount equal to the percentage of the veteran's disability as determined by federal law multiplied by the taxable value of the property after the amount that may be exempted pursuant to Section 7-37-5 NMSA 1978 is deducted". A veteran rated 60 percent with a home of $90,000 taxable value first takes the $10,000 veteran exemption and then has 60 percent of the remaining $80,000 exempt. At 100 percent the home is wholly exempt. The Department of Veterans' Services calls it "the nation's only directly proportional property tax exemption tied to a veteran's federal disability rating between 10% to 100%". It covers the joint or community property of the veteran and spouse and a home in a grantor trust. How it got here. Voters approved House Joint Resolution 5 of 2023 in November 2024, amending Article 8, Section 15 of the constitution to extend the exemption to veterans below 100 percent "in a percentage equal to the percentage of the veteran's disability rating". House Bill 47 of 2025, Laws 2025, chapter 10, struck "one hundred percent" and "and total" from the statute and applied the new formula "to the 2026 and subsequent property tax years". Before 2026 only a veteran rated 100 percent permanent and total qualified. In its first four months, 7,096 partially disabled veterans claimed it. The word "permanent". Both the constitution and subsection A require a disability "determined pursuant to federal law" to be a "permanent service-connected disability". VA does not usually label a partial rating permanent. The Department of Veterans' Services' application, DVS Form 1, asks only for the claim number, date and percentage, and certifies any "service-connected disabled Veteran". In practice a current VA rating is what the Department certifies; a veteran whose rating is expressly temporary, such as a convalescence rating, should expect the question. Occupancy, five acres and domicile. The veteran must occupy the property "continuously as the veteran's principal place of residence pursuant to regulations issued by the department". The Taxation and Revenue Department rule, 3.6.6.13 NMAC, defines principal place of residence as the dwelling "and so much of the land surrounding it, not to exceed five acres, as is reasonably necessary", and "occupy the property continuously" as physical presence for 185 days or more in the prior year plus New Mexico domicile on January 1. Acreage over five acres stays taxable. The rule dates from July 30, 2024, before the proportional exemption, and has not been revised since. Surviving spouses. Subsection C exempts the property of a surviving spouse who was married to the veteran at death and keeps occupying the home, and the Department's rule and form let a spouse claim it even if the veteran never did. Two differences from what the form says. The statute's subsection C does not say "unmarried"; the rule and DVS Form 1 bar a spouse who remarried, and the rule says a later divorce or annulment does not restore it. And subsection C says the spouse's property "is exempt" without repeating the percentage formula, while the constitution says the spouse gets "the same amount of exemption". Expect the assessor to apply the veteran's percentage. Two owners, and moving house. If two disabled veterans own the same property, subsection F uses the higher percentage. A veteran who sells mid-year may keep the exemption on the old house for the rest of the year or move it to the new one without waiting for the next notice of value (subsection D). How to claim it, and what changed in 2026. Get a certificate of eligibility from the Department of Veterans' Services with DVS Form 1, the DD-214, the VA rating decision and proof of residency. Then, under section 7-38-17, subsection E, paragraph (1), present to the assessor the Taxation and Revenue Department's form certifying that you own and continuously occupy the property, with the certificate, when you first claim and after any change in ownership. It must be filed no later than thirty days after the assessor mails the notice of value. House Bill 285 of 2026, Laws 2026, chapter 9, signed February 25, 2026 with an emergency clause, did two things here. It deleted the old subsection H, which since 2023 had let a disabled veteran file proof of eligibility at any point in the tax year and be allowed the exemption for that year. And it added paragraph (2): if you have a disability claim pending with VA and the certificate has not issued thirty days after the notice of value, you may file a protest with the assessor and attach VA's notice of receipt of the claim. The assessor must decide the pending claim within the protest period (subsection C). The act prints the federal citation as "35 U.S.C. 5103"; the claims notice is 38 U.S.C. 5103, and title 35 is the patent code. Cite 38 U.S.C. 5103 when you protest. The veto that came first. House Bill 494 of 2025 would have made the same thirty-day change. The Governor vetoed it on April 11, 2025, writing that it "actually makes it harder for veterans to obtain this important benefit by changing the current one-year window to apply to a mere 30 days". A year later she signed House Bill 285, which deleted the same one-year window and added the protest route for pending claims. So do not wait for a rating decision to file; if VA has not decided by the thirty-day mark, protest. Nothing retroactive. Even under the old subsection H the exemption was never allowed for earlier years' tax, and nothing in the 2026 act changes that.