by Yosefi Seltzer, Fort Meade Legal Assistance Attorney
New Law Requires Real Estate Tax Refunds for Some Maryland Disabled Veterans and Surviving Spouses
In the recently concluded legislative session, the Maryland General Assembly unanimously approved requiring mandatory refunds of real estate taxes for qualifying disabled veterans and their surviving spouses beginning with tax payments made after June 30, 2018. This mandatory statewide refund requirement took effect on June 1, 2021 following unanimous passage of SB269 and HB1311 by the Maryland General Assembly and became law without the Governor’s signature.
The retroactive refund requirement was necessary to address the U.S. Department of Veterans Affairs’ prolonged processing times of disability packets and appeals. Often, qualifying disabled veteran homeowners paid their property taxes for years while awaiting their disability rating determination. Once decided, the rating was often deemed effective upon the date the application was submitted. When the disabled veteran attempted to request a refund of property taxes dating back to the disability effective date, they were often denied because the Counties determined refunds were optional. The new law makes refunds mandatory for as many as three retroactive years from the date the qualifying disability was confirmed by the VA.
What follows are the qualifications for an exemption from Maryland real estate taxes. Maryland Tax Property Article Section 7-208 states that a veteran who was honorable discharged and is confirmed by the U.S. Department of Veterans Affairs to have a 100 percent service-connected disability may apply for a full exemption from real estate taxes for the house she/he owns in Maryland. There are several additional requirements to qualify:
1. The house must be the legal residence of the veteran, meaning, it must be the primary home where the veteran lives.
2. The veteran or surviving spouse must own the home.
3. The home must be occupied by no more than two families.
4. The 100 percent service-connected disability must not be the result of the veteran’s misconduct.
5. The disability must be reasonably certain to continue for the life of the veteran.
The exemption also applies to surviving spouses of service-members who died in the line of duty if the home was owned by the service-member at the time of death. As well, if the surviving spouse acquired the home within two years of the service-member’s death and the service-member or the spouse was a legal resident of Maryland at the time of the service-member’s death. The spouse must live in the home as his/her primary residence and not remarry to be eligible for the exemption.
In order to qualify, the applicant must submit a copy of the veteran/service-member’s DD-214 along with a completed Maryland Department of Assessments and Taxation Application for Exemption for Disabled Veterans Form which can be found here: https://veterans.maryland.gov/maryland-tax-benefits/. The form must be certified by the VA to confirm that the service-member was declared to have a service-connected disability that was not incurred through misconduct of the service member, that the disability is permanent and at a 100% rating. If the veteran or spouse was entitled to an exemption prior to the application’s approval, the Maryland Department of Assessments and Taxation is required to issue a retroactive refund including interest on the exempt amount of taxes that was previously paid from when the qualifying disability rating was confirmed by the V.A. dating back up to three years.
If you have further questions regarding this benefit, you may contact the Maryland Department of Assessments and Taxation. To discuss your personal legal questions, please contact the Fort Meade Legal Assistance Division for an appointment at 301-677-9504/9536.