If you serve in the military or have served, it helps to know exactly how Delaware handles property taxes for veterans. Delaware is home to Dover Air Force Base in Dover and the Delaware Air National Guard at New Castle, so it draws many military families after a PCS, which is short for Permanent Change of Station, the official military move from one duty station to another. Delaware does not offer a broad property tax exemption for veterans. Instead, it gives the most severely disabled veterans a full credit against their school property taxes, which are usually the largest part of a Delaware tax bill. This guide explains how that works 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 rules before you file.
How Delaware Helps Disabled Veterans With Property Taxes
Delaware does not erase a disabled veteran's entire property tax bill. Instead, it wipes out the school portion, which in most Delaware communities is the biggest piece. The U.S. Department of Veterans Affairs, known as the VA, is the federal agency that rates service-connected disabilities, and the top rating opens the door to this benefit.
As the Delaware Department of Finance explains, the Disabled Veterans School Property Tax Credit gives a credit against 100 percent of the non-vocational school district property tax on a qualifying veteran's primary residence. It does not cover county or municipal property taxes, so think of it as a powerful break on the largest line of your bill rather than a full exemption.
Who Qualifies
To qualify, you must receive 100 percent disability compensation from the VA due to a service-connected, permanent and total disability, or a 100 percent rating based on individual unemployability. You must also have held legal domicile in Delaware for the three years before you apply, and the credit applies only to your primary residence. The program's frequently asked questions note that you must have paid any prior property tax bills in full to claim the credit, and that you cannot claim both this credit and the Senior School Property Tax Credit.
A Note on the Senior School Property Tax Credit
If you do not qualify for the disabled veterans credit, Delaware still offers help. Homeowners age 65 and older may claim the Senior School Property Tax Credit, which covers part of school property taxes up to a yearly cap. You choose one credit or the other, not both, so compare them if you are eligible for each.
How It Works With Your Local Tax Bill
Property tax in Delaware is billed at the county level, and school taxes make up a large share of it. You apply for the Disabled Veterans School Property Tax Credit through the Department of Finance, and applications for the coming tax year are due by April 30. Once you qualify, you do not need to reapply each year, as long as you keep meeting the rules. Near Dover Air Force Base that office serves Kent County, and the Delaware Air National Guard sits in New Castle County.
If you are weighing where to settle, our guide to the military bases in Delaware can help you picture the local cost of owning a home in each market.
Military Pay and Delaware State Income Tax
Delaware has a graduated state income tax, with a top rate of 6.6 percent, but it gives military retirees a growing break. The way the state treats your income depends on the type of pay.
Delaware offers a military pension exclusion that has expanded in recent years. As the state's personal income tax guidance reflects, a military retiree under age 60 can exclude up to $25,000 of military pension for the 2026 tax year, a figure that rose from $15,000 in 2024 and $20,000 in 2025. By comparison, a non-military pension for someone under 60 is excluded only up to $2,000. Retirees age 60 and older can generally exclude up to $12,500 of eligible retirement income. VA disability compensation is not part of your federal income, so Delaware does not tax it. Active-duty pay is generally taxable for Delaware residents, so your residency choice matters. Because rates and rules can change, confirm the current details with the Delaware Division of Revenue before you file.
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 a Delaware resident just because your service member got orders here.
Under the related federal rules, a service member, the spouse, or both may choose the service member's home state, the spouse's home state, or the service member's permanent duty station for residency. Because that choice affects both states' taxes, confirm yours before you file. For the property tax credit in this guide, what usually matters most is that the qualifying veteran holds Delaware domicile and uses the home as a primary residence.
