If you serve in the military or have served, the Colorado disabled veteran property tax exemption can lower what you owe on your home each year. Colorado is a popular place to land after a PCS, short for Permanent Change of Station, the official military move from one duty station to another. The state offers a property tax break for some disabled veterans and Gold Star spouses, plus income tax breaks on certain military pay. This guide covers the main rules and points you to the state's own sources. Tax rules change, so treat this as a starting map, not the final word.
The Colorado Disabled Veteran Property Tax Exemption
Colorado's main property tax benefit for veterans is the Disabled Veteran Property Tax Exemption. If you qualify, the state exempts 50 percent of the first $200,000 of the actual value of your primary residence. In plain terms, up to $100,000 of your home's value is removed before the tax is figured, and the state reimburses your county for the lost revenue. You can read the rule on the Colorado Division of Property Taxation page for veterans with a disability and Gold Star spouses.
Who Qualifies
To qualify as a veteran, you must have served on active duty in the U.S. armed forces, received an honorable discharge, and have a service-connected disability rated by the VA as 100 percent permanent. The VA is the U.S. Department of Veterans Affairs, the federal agency that rates these disabilities. "Permanent and total," often shortened to P&T, means the VA does not expect the disability to improve.
Colorado also covers veterans granted individual unemployability status. IU, short for individual unemployability, applies to veterans rated below 100 percent who the VA pays at the 100 percent rate because their disability keeps them from holding steady work. As the Colorado Division of Veterans Affairs property tax exemption page explains, IU veterans are usually rated at least 70 percent but paid at the 100 percent level. There is no age requirement.
Gold Star Spouses and Surviving Spouses
The exemption can also reach families. A Gold Star spouse is the surviving spouse of a service member who died in the line of duty, or of a veteran whose death resulted from a service-related injury or disease. Gold Star spouses can qualify for the same 50 percent break, and remarriage does not disqualify them. A surviving spouse of a veteran who already received the exemption may also apply to keep it, as long as they have not remarried and still live in the same home. The Division of Veterans Affairs page lists the exact rules for each group.
How It Works With the Senior Exemption and Local Property Tax
Colorado has no statewide property tax. It is set and collected locally, and you claim the exemption through your county assessor, the county official who keeps property records and processes exemptions. That is why two neighbors in different counties can have different tax bills with the same benefit.
There is a second, parallel program that works almost the same way. The Senior Property Tax Exemption gives homeowners who are at least 65 years old on January 1, and who have owned and lived in the home for at least 10 years in a row, the same 50 percent break on the first $200,000 of actual value. The Colorado Division of Property Taxation senior exemption page has the details. Here is the key point so you do not confuse the two: you cannot claim both on the same home in the same year. Pick the one that fits and file for that single exemption.
If you are deciding where in Colorado to land, our guides can help you picture local cost of living. See our roundup of what military bases are in Colorado, our PCS to Fort Carson and Colorado Springs 2026 guide, and our Colorado Springs housing market update for one of the state's biggest military communities.
Military Pay and Colorado State Income Tax
Colorado does have a state income tax, so how your military pay is treated matters. It uses a flat income tax rate, meaning the same rate applies to all taxable income rather than rising with higher earnings.
The Flat Income Tax Rate
The statutory flat rate is 4.4 percent. In some recent years a temporary reduction has lowered it, such as to 4.25 percent, when the state collected revenue above its constitutional limit and returned the difference to taxpayers. Because the exact rate can shift from year to year, confirm the current figure on the Colorado Department of Revenue individual income tax guide.
Military Retirement Subtraction
Colorado lets retired service members subtract part of their military retirement pay, and the amount depends on your age at the end of the tax year. If you are under age 55, you may subtract up to $15,000 of military retirement benefits for the 2026 tax year. The Colorado Department of Revenue retired servicemembers page shows this limit, which has held at $15,000 since 2022.
If you are at least 55 years old, you use the broader pension and annuity subtraction instead. As the Department of Revenue guidance on pensions and annuities explains, that subtraction is generally up to $20,000 for ages 55 to 64 and up to $24,000 for ages 65 and older, and it covers pension and annuity income broadly, not just military retirement. Confirm the current figures before you file.
VA Disability Compensation
One note many families miss: VA disability compensation is not taxed by Colorado. Because that compensation is not part of your federal taxable income, it is not part of your Colorado taxable income either.
