What property tax relief do disabled veterans get in Tennessee?
By Kyle Melvin · NMLS #1486450 · REV Mortgage · Licensed in Tennessee ·
Short answer
Tennessee reimburses qualifying disabled veterans for the property tax on a capped portion of their home's value under Tennessee Code § 67-5-704 — a relief program administered through the county trustee and the state Comptroller, not an exemption applied to the bill. Veterans rated 100% permanent and total, paid at the 100% rate for individual unemployability, or with certain service-connected disabilities qualify without an income test, and the relief passes to an un-remarried surviving spouse. It stacks on an ordinary VA loan in a state with no income tax on wages.
- State
- Tennessee
- State loan program
- None — federal VA loan only
- Installations covered
- Fort Campbell
- Licensing
- Kyle Melvin is licensed in Tennessee
Tennessee's benefit is structured differently from most states', and the difference matters for the payment. It is not an exemption that removes value from the tax roll; it is a relief program that reimburses the tax on a capped portion of the home's value, funded by the state and administered by the county trustee. For a qualifying disabled veteran there is no income test, the relief is substantial on a modest home, and it passes to a surviving spouse. Tennessee also has no state income tax on wages, which is part of the same picture for a retiree.
The disabled veteran relief
Tenn. Code Ann. § 67-5-704 provides relief to a veteran who owns and lives in the home and who is rated by VA as having:
- A 100% permanent and total service-connected disability, or
- Compensation at the 100% rate for individual unemployability, or
- Certain enumerated service-connected disabilities — paraplegia, permanent paralysis of both legs and the lower body, legal blindness, or loss or loss of use of two or more limbs — as certified by VA, or
- A disability from being a prisoner of war, in certain circumstances.
The relief is calculated on the tax attributable to a capped amount of market value. Value above the cap is taxed normally. The cap is set in statute and adjusted from time to time, and this page does not print it. On a modest home in Clarksville the cap covers most or all of the value; on a higher-priced home in Nashville's suburbs it covers a portion.
Surviving spouses of qualifying veterans, and of service members killed in action or who died from a service-connected condition, receive the same relief as long as they do not remarry and continue to own and occupy the home.
No income limit applies to the veteran provision. Tennessee's general elderly and disabled homeowner relief under § 67-5-702 is income-tested; the veteran relief is not.
How it is administered
You apply with the county trustee (or city collector for municipal taxes) each year, typically within a window after the tax bill is issued, with the VA letter documenting the rating. The trustee verifies eligibility with the Tennessee Comptroller's Division of Property Assessments. Many counties apply the relief as a credit when you pay, so that the veteran pays only the tax above the capped value; others collect the full bill and the state reimburses. Ask the trustee in your county which way it works, because it determines whether the relief shows up as a lower bill or a later check.
Tennessee veteran benefits at a glance
| Benefit | Authority | Who qualifies | Effect |
|---|---|---|---|
| Disabled veteran property tax relief | Tenn. Code Ann. § 67-5-704 | 100% P&T, 100% IU, or enumerated disabilities; no income test | Tax on a capped portion of value reimbursed or credited |
| Surviving spouse relief | § 67-5-704 | Un-remarried surviving spouse of a qualifying veteran or KIA member | Same relief continues |
| No wage income tax | Tennessee Constitution and statute | Everyone | No state tax on wages or military retirement |
| VA loan | Federal | Any eligible veteran or service member | No down payment, no mortgage insurance; funding fee waived with a compensable rating |
What it does to a payment
Because the relief is administered through the trustee rather than the assessor, the lender's escrow analysis may not reflect it automatically. If your county applies it as a credit at payment, tell the lender so the escrow can be set on the net bill; if your county reimburses, the escrow collects the full tax and you receive the relief separately. Either way, the first year's payment usually reflects the full bill until the paperwork is in place.
Stacking with the VA loan
Tennessee has no state-run veteran mortgage program. The VA loan guidelines apply, the funding fee is waived at any compensable rating, and full entitlement means no VA loan limit. If you are arriving at Fort Campbell on orders, the PCS Home Buying Guide has the timeline; the Fort Campbell guide covers the Clarksville market and the Kentucky line.
Tennessee base guides
Questions people also ask
- Is Tennessee's benefit an exemption or a refund?
- Relief, administered as a reimbursement. You pay the tax bill, or the county credits it at the time of payment, and the state reimburses the tax on the capped portion of the home's value. In practice many counties apply the credit up front, so the veteran pays only the tax above the cap.
- Is there an income limit for disabled veterans?
- No. The income limit that applies to Tennessee's elderly and disabled homeowner relief does not apply to the disabled veteran provision. The veteran's rating and ownership are the tests.
- What ratings qualify?
- A 100% permanent and total service-connected disability; compensation at the 100% rate for individual unemployability; or certain enumerated service-connected disabilities such as paraplegia, loss of limbs or blindness, as certified by VA. Ratings below those thresholds do not qualify for the veteran provision.
Apply with Kyle
Buying in Tennessee?
Kyle is licensed here and stacks the state benefits on the VA loan as part of the file, not as an afterthought. Start with your COE and the state you are moving to.