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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
property tax; exemption; veterans
Purpose
An emergency measure that exempts the primary residence, rather than the property, of a veteran with a service-connected disability whose U.S. Department of Veterans Affairs (VA) disability rating is 100 percent from the full amount of property tax and requires the primary residence, if owned jointly by an eligible veteran and their spouse, to be treated as if owned solely by the veteran.
Background
All property in Arizona is subject to taxation with certain exemptions outlined in the Arizona Constitution and prescribed by statute. The property of Arizona residents who are widows, widowers, persons with total and permanent disabilities or veterans with service or nonservice-connected disabilities are exempt from property tax subject to the conditions and limitations prescribed by statute. Laws 2025, Chapter 247 exempts the property of a veteran with a service-connected disability whose VA disability rating is 100 percent from the full amount of property tax. The surviving spouse of a veteran with a service-connected disability whose VA disability rating is 100 percent may continue to claim the full property tax exemption as long as the spouse does not remarry and the property is used as the spouse's primary residence
For TY 2025, the maximum exemption amount is: 1) $4,476, if the person's total property assessment does not exceed $31,347; or 2) no exemption if the person's total property assessment exceeds $31,347. A veteran with a service or nonservice-connected disability is eligible for a portion of the maximum exemption amount that is equal to the percentage of the person's disability, as rated by the U.S. Department of Veterans Affairs. (A.R.S. §§ 42-11002 and 42-11111).
If clarifying the property type that is fully exempt from property tax results in a tax shift that affects the obligations of the state, there may be a fiscal impact to the state General Fund.
Provisions
1. Exempts the primary residence, rather than the property, of a veteran with a service-connected disability whose VA disability rating is 100 percent from the full amount of property tax.
2. Requires a primary residence that is owned jointly by an eligible veteran and their spouse to be treated as if owned solely by the veteran, for the purposes of the full property tax exemption.
3. Applies the modified exemption to taxable years beginning January 1, 2026.
4. Makes technical changes.
5. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Prepared by Senate Research
January 26, 2026
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