If you serve in the military or have served, an Arizona veteran property tax exemption can lower what you owe on your home, and for some veterans it can erase the bill on a primary residence entirely. Arizona is a popular landing spot after a PCS, which is short for Permanent Change of Station, the official military move from one duty station to another, and it has grown more generous to veterans in the last few years. This guide walks through the main rules in plain language and points you to the state's own sources. Tax law changes, so treat these figures as a starting point and confirm the current amounts before you file.
The Arizona Disabled Veteran Property Tax Exemption
Arizona offers a property tax exemption to honorably discharged veterans who have a service-connected or nonservice-connected disability. The VA is the U.S. Department of Veterans Affairs, the federal agency that rates service-connected disabilities. This exemption is set in Arizona law under A.R.S. Section 42-11111 and is run by the county assessor in the county where your home sits.
Arizona recently rewrote how this exemption works. According to the Arizona Department of Revenue property tax FAQs, the updated rules apply to tax years that begin on or after January 1, 2026, and they sort veterans into three groups:
- Service-connected with a 100 percent VA disability rating: a full exemption of the qualifying veteran's primary residence.
- Service-connected with less than a 100 percent rating: an exemption up to a maximum dollar amount, prorated to match your VA rating.
- Nonservice-connected disability at any rating: an exemption up to a maximum dollar amount, prorated to match your VA rating.
In short, a veteran with a 100 percent service-connected rating can take the full value of a primary home off the tax rolls, while veterans with a lower or nonservice-connected rating get a partial break that scales with their rating.
Income Limit and the Old Value Cap
Two limits used to shrink this benefit. The Department of Revenue says the 2026 update removed the assessed property value cap for the veteran exemptions, so a higher-value home no longer disqualifies a veteran. A household income limit still applies to every individual exemption under the statute, including the veteran exemption. The income ceiling and the maximum partial-exemption amount are set dollar figures that Arizona adjusts each year for inflation, so confirm the current numbers with your county assessor before counting on them.
Surviving Spouses
The full exemption can follow a surviving spouse. If a veteran held the 100 percent service-connected full exemption on the home, the unremarried surviving spouse can keep that exemption on the same residence, as the Department of Revenue's FAQs explain. The benefit stays with the property, so it ends if the home is sold.
How It Works With Local Property Taxes
Arizona has no statewide property tax. Taxes are levied locally by counties, cities, school districts, and special districts, and the county assessor administers exemptions. That is why two veterans with the same rating can see different dollar savings depending on where they live and what the local tax rate is.
Arizona does not have a broad homestead exemption that every homeowner can claim, the way some states do. The veteran exemption above is the main property tax break tied to your home, and you may only claim one individual exemption even if you qualify under more than one category. If you are weighing where to settle, our guides to the military bases in Arizona, a PCS to Luke Air Force Base and Phoenix, and a PCS to Fort Huachuca can help you picture the local cost of owning in each market.
Military Pay and Arizona State Income Tax
Arizona does have a state income tax, so how your military income is treated matters. The good news is that Arizona shields most military pay.
According to the Arizona Department of Revenue's military tax filing page, Arizona has not taxed active-duty military pay since 2006, and members can subtract that pay to the extent it is included in Arizona income. Pay for active service as a National Guard member or reservist is also subtracted.
Military retirement is treated just as well. The same page states that Arizona excludes benefits, annuities, and pensions paid as retired or retainer pay of the uniformed services for tax year 2021 and forward. That means your military retirement pay is fully exempt from Arizona income tax. VA disability compensation is not part of your federal income to begin with, so Arizona does not tax it either. For a broader rundown of state benefits, see the Arizona Department of Veterans' Services benefits guide.
A Note for Military Spouses: MSRRA
If you are a military spouse, the Military Spouse Residency Relief Act, known as MSRRA, may matter to you. MSRRA is a federal law that lets a military spouse keep a home state for tax and voting purposes even after moving on military orders. You do not automatically become an Arizona resident just because your service member got orders here.
