Disabled veteran property tax exemption in Maryland
If you are a Maryland veteran with a VA disability rating, you may qualify for a substantial reduction or full elimination of your property tax bill. This page walks through how the exemption works in Maryland, who qualifies, and how to apply.
How Maryland's disabled veteran property tax exemption works
Maryland provides a full exemption with specific qualifications. The implementation varies by county.
100% disability rating
A Veteran rated 100% permanent and total service-connected by the VA receives a full exemption from real property tax on the dwelling and the curtilage (the surrounding yard used with the residence). There is no income limit and no value cap. The exemption applies while the Veteran owns and lives in the home as a primary residence.
Surviving spouse
An unremarried surviving spouse of a qualifying Veteran keeps the exemption. Surviving spouses of service members killed in the line of duty also qualify.
Lower disability ratings
Maryland does not have a graduated state-level disabled veteran exemption for lower ratings. Some counties (Anne Arundel, Howard, others) provide additional county-specific benefits.
How to apply
File SDAT form AT3-45 (the disabled-Veteran exemption application) with your local State Department of Assessments and Taxation office, along with proof of your 100% permanent-and-total rating or surviving-spouse status. You may apply at any time; there is no September 1 deadline, and a refund may be available for prior periods in some circumstances.
How this fits with your VA loan
When you buy a home in Maryland with a VA loan, your lender estimates property tax as part of your monthly payment (the T in PITI). If you qualify for the disabled veteran exemption, that monthly tax escrow drops or zeroes out — which lowers your full monthly payment and improves your debt-to-income ratio. Some lenders are willing to use the post-exemption tax figure during underwriting; others want you to qualify on the pre-exemption number. Mike can structure this correctly during pre-approval so you do not lose buying power.
Common questions
Do I need to be 100% disabled to qualify?
Yes. Maryland's full exemption requires a 100% permanent and total service-connected rating. Maryland has no graduated state exemption for lower ratings, though some counties (such as Anne Arundel and Howard) offer additional county-level credits.
What if my disability rating changes?
Rating changes can affect eligibility. If you become rated 100% after buying, you can apply for the exemption going forward (not retroactively in most cases). If your rating decreases below the qualifying threshold, the exemption ends.
Does the exemption transfer if I sell and buy a new home?
You typically need to reapply when you move. The exemption applies to your primary residence, so each new homestead requires a fresh application with the county.
What about my spouse if I pass away?
Maryland allows the surviving spouse to continue the exemption under specific conditions — see the detailed section above. Estate planning around this benefit is worth discussing with a Maryland attorney before any major decisions.