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S.F. No. 84 - Disabled Veterans Homestead Valuation Exclusion Benefit Eligibility Extension to Surviving Spouse
Author: Senator Andrew R. Lang
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Date: February 1, 2017


Section 1 [Homestead of Disabled Veteran or Family Caregiver] makes changes beneficial to a spouse of a disabled veteran or service member killed in active service with respect to property taxes. 

Under current law, the surviving spouse of a veteran with a total (100 percent) and permanent disability rating or the surviving spouse of a member of the U.S. armed forces who dies due to a service-connected cause while serving honorably in active service, can exclude a specified amount of the market value of the homestead from the property’s taxable market value. Under current law, that spouse may make the exclusion for the current taxable year of the veteran’s or service member’s death and for eight additional years or until the spouse remarries or sells, transfers or disposes of the property. 

This section eliminates the eight-year limit on the spouse’s use of this exclusion, so that the exclusion is available until the spouse sells, transfers, or disposes of the property.

This section makes the exclusion available to the surviving spouse of a veteran who had not applied for this exclusion if certain conditions are met:

(1) the spouse must file a first-time application within two years of the death of the veteran or by June 1, 2019, whichever is later;

(2) the spouse must hold title to the homestead and permanently reside there upon the veteran’s death;

(3) the veteran must meet honorable discharge requirements;

(4) the spouse must meet annual application requirements; and

(5) the  U.S. Department of Veterans Affairs must certify that the veteran had a total (100 percent) and permanent disability rating or the spouse has been awarded dependency and indemnity compensation.

This section is effective beginning with taxes payable in 2018.

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