Disabled Veteran Property Tax Exemption in Maryland (2026)

Last reviewed August 26, 2026. Every figure, form and deadline on this page is re-checked against the state’s own government sources once a quarter, and the date above is updated when we do it.

Maryland’s disabled veteran property tax exemption, under Tax-Property Article §7-208, fully exempts your home from real property tax if you have a 100 percent, permanent and total service-connected disability rating (or a lower rating found permanently unemployable). There is no dollar cap and no income test. Maryland also lets you file the application for a home you have not closed on yet, which most states do not allow.

What almost every guide leaves out is Tax-Property §9-265: a separate, local-option credit of 25 to 50 percent of your county and municipal tax for ratings of 50 percent and up, in counties that have adopted it. If you are not at 100 percent P&T, that is worth checking before you assume Maryland has nothing for you.

How much is the Maryland exemption worth?

Your rating	What Maryland gives you
100% permanent and total (or a lower rating VA has found permanently unemployable)	Full exemption from real property tax on your dwelling, curtilage and lot, statewide, under §7-208. No cap, no income test.
75% or higher, not otherwise exempt under §7-208	50% credit on county and municipal property tax, where the county or municipality has adopted the credit. Federal adjusted gross income capped at $100,000.
50% to 74%	25% credit on county and municipal property tax, same local adoption and income requirements.

The full exemption is a state law, applies everywhere in Maryland, and is not optional for a county to offer. The 25/50 percent credit is different: it is a local option under §9-265, meaning the Mayor and City Council of Baltimore City or a county or municipal governing body has to pass its own law to offer it. Maryland’s own Department of Veterans and Military Families lists Anne Arundel, Baltimore, Calvert, Cecil, Frederick, Harford, Howard, Montgomery and Washington counties as having adopted local property tax exemptions or credits for veterans, and says the list may not be complete because local governments can change it during the year. If your county is not on that list, ask your local assessment office directly.

Why most guides only mention the 100% exemption

Search results and national veteran-benefit round-ups almost all describe only §7-208, the full exemption, because it is the one uniform statewide rule and the easiest to summarize. §9-265 is a 2023 addition (amended again by House Bill 63 in 2024) that depends on your specific county passing its own ordinance, so it does not fit neatly into a 50-state table. If you are rated 50 to 99 percent and a site told you Maryland has nothing for you, that is why. Check with your county before you accept that.

Who qualifies in Maryland?

For the full statewide exemption under §7-208, you need:

• An honorable discharge or release under honorable conditions.
• A permanent 100 percent service-connected disability rating from the VA. Maryland’s State Department of Assessments and Taxation (SDAT) also grants it where a rating below 100 percent comes with a VA finding of permanent, individual unemployability, following a Maryland Attorney General’s opinion on the statute.
• Ownership and occupancy of the dwelling as your principal residence. The exemption covers the house, the lot or curtilage, and structures needed to use the property as a home, such as a garage.

There is no income test and no age requirement on the §7-208 exemption. It is granted in addition to any other property tax exemption you already have, except that you cannot double up an exemption for the same reason under a related section, §7-207.

The local credit, if you are not at 100%

For the §9-265 credit you need a 50 percent or higher rating, an honorable discharge, and federal adjusted gross income at or below $100,000 for the prior tax year. Your county or municipality must have adopted the credit by local law for it to exist where you live.

Surviving spouses

An unremarried surviving spouse can receive the §7-208 exemption in three situations: on the home the veteran owned if it already had the exemption and the spouse now owns and lives there; on a home the veteran occupied but did not own, if the veteran was domiciled in Maryland at death and the spouse now owns and lives there; or on a new home the spouse later buys, carried over up to the value of the earlier exemption. Surviving spouses of service members who died in the line of duty can also qualify. Counties that have adopted the §9-265 local credit may separately choose to continue it for a surviving spouse too.

Can the exemption be used before closing?

Maryland is one of the more buyer-friendly states on this question. Unlike states that require you to own the home on a fixed date such as January 1, Maryland’s statute explicitly lets you apply for the §7-208 exemption on a specific home before you have purchased it. SDAT must process that application within 15 business days and send you a letter stating whether it is preliminarily approved or denied, and if approved, the exemption amount for the home you intend to buy. Once you actually own the home named in that letter, the exemption applies without filing anything else.

If you did not file in advance, you still have a second path: apply within 30 days after settlement and the exemption is abated retroactively back to your settlement date, so you are not stuck paying a full year of tax on a home that should have been exempt from day one.

Maryland is one of only four states that put a pre-purchase determination in the statute

State rule. The rule above puts Maryland in a small group. The other three states that let a qualifying veteran get something in writing from the taxing authority before they own the home are:

• Virginia: file the normal exemption paperwork plus documentation of the purchase agreement and the commissioner of the revenue must process it and send an approval or denial letter, with the exemption amount, within 20 business days. Va. Code § 58.1-3219.6(B). The exemption itself takes effect only after you become the owner.
• Utah: a qualifying disabled veteran claimant may apply before owning the residence with a real estate purchase contract, filed in the county where the home sits, and the county must send a receipt with preliminary approval or denial and the calculated amount within 15 business days. Utah Code § 59-2a-502(5).
• Alabama: for closings on or after October 1, 2026, the tax assessing official issues a tentative certificate of permanent and total disability before purchase, within 20 days, and the statute says a settlement agent or loan closing officer may not consider the homestead ad valorem taxes when calculating debt-to-income once you hand over that certificate. Ala. Code § 40-9-21.3.

One correction worth having, because it gets repeated a lot: outside of Alabama these laws bind the county or the state tax office, not your lender. They force the taxing authority to answer you in writing before closing. They do not order a lender to waive or exclude the tax. Alabama is the only one of the four that reaches into the loan file itself. North Carolina has a bill that would add a prequalification process, House Bill 94, which passed the House 112 to 0 in May 2025 and has sat in Senate Rules since. It is not law, so do not plan around it.

Getting the county’s answer is not the same as getting the lender’s, so shop it

Lender overlay and market practice. Maryland law tells the taxing authority to answer you. It does not tell your lender what to do with that answer. Whether the lower tax figure helps you qualify still comes down to lender policy, and here is what that looks like in practice, from lender guidance we collected directly in August 2026:

• Some lenders will use the reduced tax figure before closing, and some will not. One wholesale lender told us plainly it will consider a veteran real estate tax exemption and a reduced property tax number in the qualifying payment, as long as underwriting gets the local exemption rules and proof you meet them. If the documentation is short, underwriting uses the full tax amount instead. Another wholesaler checks it state by state and county by county on every single closing. If your lender says no, that is not the final answer on the benefit. It is that lender’s answer. Ask another one.
• Every lender will require proof of eligibility if the lower tax is doing work in your file. If the reduced tax is what lowers your debt ratio or raises your residual income, expect to document it: your VA rating decision or award letter showing the qualifying disability, the taxing authority’s own published exemption rules, and usually the completed exemption application. One lender’s VA guide requires proof of 100 percent disability from VA plus a copy of the completed county application for property tax exemption, and where the application has to be notarized it takes an unsigned copy up front and conditions it to be signed at closing.

Overlays cut both ways. One large investor allows the anticipated reduced tax for qualifying only for primary residences in California, Florida, Maryland, Texas, Utah and Virginia, and only with proof the veteran applied to the taxing authority before the note date. Maryland is on that list, which is a real advantage. It is still one investor’s policy, not a rule every lender follows, so confirm it on your file rather than assuming it.

Practically, ask your loan officer two questions before you write an offer: will you use a reduced tax figure to qualify me, and will you waive the tax escrow. Different lenders give different answers on the same file, and that is normal, not a mistake.

What we can do instead: waive the escrow

If the exemption cannot be counted yet, the fallback is to not escrow the taxes at all, so your monthly housing expense is not carrying twelve months of a tax bill that is about to shrink. VA does not require escrows, so this is a lender and investor decision, and many will allow it on a strong file. There are lenders that will waive the tax escrow on a VA loan even when the property taxes have not been waived yet, so this is a real option and not a rare favor. Some will waive it with no restrictions at all, others want the eligibility proof and the correct paperwork in the file first. Waiving escrow does not require the taxing authority to approve anything, which is why it is usually the easier ask of the two. Understand the tradeoff: with no escrow account, you pay the taxing authority directly and you are on your own for those tax bills until the exemption is actually approved, and approval can take a while. Budget for it and pay the bill on time; a delinquent tax bill on a home you just bought is an expensive way to save a few dollars of monthly payment.

One more VA rule to know, because it runs the other way. On estimating taxes, Chapter 4 says “If taxes are expected to increase, use the increased amount.” There is no matching VA instruction that lets an underwriter write down your taxes, which is why the reduction is always a lender option and never a VA entitlement. The Chapter 4 text is here if you want to read it.

Plan for the gap between closing and approval

These applications take a while to process, and the taxing authority’s calendar does not wait for your loan. A tax bill can come due between your closing date and the day your exemption is approved, and you are the owner, so that bill is yours. That can include taxes attributable to the period the prior owner held the home. One lender’s VA guide makes it explicit and requires a signed letter of explanation from the veteran borrower stating they are solely responsible for the property taxes owed for the prior owner. Keep the money set aside and do not assume the first bill will be reduced, especially if you waived escrow and Maryland is billing you directly.

How to apply in Maryland, step by step

1. Get the right application. Maryland’s Department of Assessments and Taxation (SDAT) publishes separate forms for each situation: 100 Percent Disabled Veteran Exemption Application (PDF download), Surviving Spouse of a 100 Percent Disabled Veteran Exemption (PDF download), and Disabled Active Duty Service Member Exemption Application (PDF download).
2. Attach your proof. A copy of your discharge certificate (DD-214), and either a VA certification completed on SDAT’s own form or a copy of your final VA disability rating decision. The rating decision has to show the disability is 100 percent, service-connected, permanent and total, along with the rating decision date and the effective date. SDAT cannot accept a VA Summary of Benefits letter in place of the rating decision.
3. Buying a home? File before you close if you can. You can submit the application for a specific home before you own it. SDAT has 15 business days to send a preliminary approval or denial letter with the exemption amount. If you skip this step, file within 30 days after settlement instead to get the exemption backdated to your closing date.
4. Send it to your local SDAT assessment office, not a county tax collector. Maryland’s real property assessments and these exemptions are administered by the state through local assessment offices in each county and Baltimore City. Use the SDAT directory of local assessment offices to find the right office and its contact information, rather than guessing.
5. There is no deadline to watch. The September 1 cutoff that applies to most Maryland property tax exemptions does not apply to the disabled veteran or surviving spouse exemptions. File whenever your paperwork is ready.
6. Ask about the local credit separately. If you are rated 50 to 99 percent and want to know whether your county has adopted the §9-265 credit, that application goes to the county or municipal government, not SDAT. Anne Arundel, Baltimore, Calvert, Cecil, Frederick, Harford, Howard, Montgomery and Washington counties are listed by Maryland’s veterans department as having adopted local property tax exemptions as of this writing, and the list can change, so confirm with your county.

Can you get a refund of prior year taxes?

Yes, going back up to three years. If you qualified in a prior year but the exemption was not yet on the books, Maryland requires the state, county, or municipal corporation to refund the tax you already paid, going back to the calendar year you first became eligible, for up to a 3-year period.

If the government does not pay the refund within 60 days after you apply for it, interest starts accruing from the date you filed the refund application, at the same rate that jurisdiction charges on overdue taxes.

Other Maryland programs for disabled veterans

The property tax exemption is the biggest homeownership benefit, but Maryland runs a few others worth knowing about.

• Military retirement income subtraction (state). Veterans or spouses of military retirees can subtract military retirement income from Maryland taxable income: up to $20,000 if you are 55 or older by the last day of the tax year, or up to $12,500 if you are under 55. Claim it on Maryland Form 502 following the resident tax booklet instructions. This is separate from the property tax exemption and applies whether or not you own a home.
• Maryland Pension Exclusion (state). If you are 65 or older, or totally disabled, or your spouse is totally disabled, you may also qualify for Maryland’s pension exclusion, which is a different subtraction than the military retirement one above. Ask a tax preparer which one, or both, apply to your return.
• Maryland Veterans Trust Fund (state). A state fund that provides emergency financial assistance to eligible veterans and their families for things like housing, utilities and medical needs. Administered by the Department of Veterans and Military Families.
• Local property tax exemptions beyond §9-265 (county). Some counties, including Frederick and Washington counties, publish their own instruction and application forms for local veteran property tax relief that go beyond what the state requires. Check your county’s own page, since Maryland’s veterans department is explicit that its list of adopting counties may not be complete and can change during the year.
• Adapting a home for a service-connected disability (federal). The VA’s Specially Adapted Housing and Special Home Adaptation grants, and smaller HISA grants, pay to build or modify a home for certain service-connected disabilities. These are federal VA benefits, not Maryland programs, and can be used alongside a VA loan.

Maryland disabled veteran property tax FAQs

How much is Maryland’s disabled veteran property tax exemption worth?

If you have a 100 percent, permanent and total service-connected disability rating, your dwelling and the land under it are fully exempt from real property tax under Tax-Property Article 7-208. There is no dollar cap and no income test on that exemption.

What if I am rated below 100 percent?

Many people are told Maryland has nothing for you below 100 percent P&T. That skips Tax-Property Article 9-265, a local county or municipal credit of 50 percent of your county and municipal tax at a 75 percent or higher rating, or 25 percent at 50 to 74 percent, with a $100,000 income limit. It only exists where the county or municipal government has adopted it, so check with your local assessment office.

Can I use the Maryland exemption on a house I have not closed on yet?

Yes, and this is unusual. Maryland lets you file the 100 percent disabled veteran application for a specific home before you buy it. The Department has 15 business days to send a preliminary approval or denial letter with the exemption amount, and if you apply within 30 days after settlement the exemption is abated back to your settlement date.

Is there a filing deadline?

No. Most Maryland property tax exemptions have a September 1 deadline for the coming tax year, but the disabled veteran and surviving spouse exemptions are excluded from that deadline. You can apply at any time.

Can a surviving spouse keep the Maryland exemption?

Yes, in several situations: if the veteran had the exemption and the spouse keeps living in the same home, if the veteran was domiciled in Maryland at death and the spouse now lives in the home the veteran occupied, or on a later home the spouse buys, up to the value of the earlier exemption. The spouse must not have remarried.

Can I get a refund for past years I did not know I qualified?

You can apply for a refund of state, county and municipal property tax paid while you were eligible, for the 3-year period starting the calendar year you first became eligible. Interest is added if the refund is not paid within 60 days of your application.

Does Maryland tax my military retirement pay?

Not entirely. If you are 55 or older you can subtract up to $20,000 of military retirement income from Maryland taxable income, and up to $12,500 if you are under 55. That is separate from the property tax exemption and is claimed on Form 502.

Where to go next

• Disabled Veteran Property Tax Exemption Guide, every state’s exemption, form and deadline in one directory
• Funding Fee Waivers and Refunds Guide, the fee is waived outright at a 10 percent rating or higher, and can be refunded if you already paid it
• Property tax discounts for veterans on VA disability, the national overview
• Bad credit VA loans in Maryland
• VA loans, the basics
• Maryland SDAT, Real Property Tax Exemptions and application forms
• Directory of all Maryland local assessment offices
• Maryland Tax-Property Article 7-208, the full exemption statute, and 9-265, the local credit statute