New York is turning a local option into a statewide rule for the most severely disabled veterans. Under a law signed February 13, 2026, a full 100 percent property tax exemption on the home becomes mandatory on every assessment roll finalized after October 1, 2026, in every county, city, town and school district.
The exemption is narrow. The Association of Towns of the State of New York describes it as a targeted subset of 100 percent service-connected disabled veterans, and a veteran has to clear four separate disability tests plus a discharge test before an assessor can grant it.
How the exemption got from optional to required
The new tier sits in subdivision 11 of Real Property Tax Law section 458-a, which Chapter 672 of the Laws of 2025 added. As first written, the exemption was optional. A locality had to opt in by its taxable status date, March 1, 2026 for most municipalities, for the exemption to reach 2027 bills.
Chapter 77 of the Laws of 2026 changed that. The Association of Towns says it was signed February 13, 2026 and made the exemption mandatory statewide for assessment rolls finalized after October 1, 2026. A municipality that never opted in no longer has a choice once its rolls are finalized after that date.
The timing still varies by tax. The Association says the exemption is required for 2027-2028 school taxes. For town and county taxes, it is required for 2028 in localities with a March 1 taxable status date, while 2027 town and county bills carry it only where the locality opted in by March 1, 2026.
The four disability tests and the discharge test
Every test has to be met. The Association of Towns lists the disability requirements as a permanent and total disability caused by military service, a VA rating of 100 percent disabled, a VA finding that the veteran is individually unemployable, and eligibility for, or receipt of, a VA Specially Adapted Housing grant for home modifications tied to the disability.
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The discharge must be under honorable conditions, or fall in a qualifying category the law defines with a discharge other than bad conduct or dishonorable. The property must be the veteran’s primary residence. The exemption covers the home and the land needed for the adapted features.
The housing grant test does most of the filtering. The VA says the Specially Adapted Housing grant goes to veterans with qualifying service-connected disabilities such as loss, or loss of use, of more than one limb, blindness in both eyes with 20/200 visual acuity or less, and certain severe burns. The maximum grant for fiscal year 2026 is $126,526.
Anyone who owns, or plans to own, a permanent home can apply through the VA’s online Form 26-4555, and paper and in-person applications are also accepted, according to the same page. A veteran with a 100 percent rating who has never been found eligible for the housing grant does not meet the fourth test as the Association describes it.
Until now, the ceiling for a disabled veteran in most places was the alternative veterans exemption. The Association of Towns says the existing section 458-a exemption is capped at up to 75 percent, built from 15 percent for wartime service, 10 percent for service in a combat zone and 50 percent for a disability rating.
Those percentages reduce assessed value, and the state’s own guidance adds a local twist. The New York tax department’s veterans exemption guide says each reduction is subject to maximum limits set by the local community and that none of the exemptions apply to special district levies or special assessments. That guide describes the standard alternative exemption, and the Association’s summary does not say whether the new full exemption reaches special district charges, so a veteran should ask the assessor how those lines on the bill will be treated.
Moving from a capped percentage to a full exemption changes the size of the bill reduction, not just the rate. A home that carried a 75 percent exemption still produced a tax bill on the remaining quarter of its assessed value. Under the new tier, qualifying school, town and county taxes on the home and the land needed for the adapted features are cut to nothing.
Filing with the assessor by the March 1 taxable status date
The same state guide says veterans apply through the local assessor. Applications for the standard exemptions go on Form RP-458-a, and each application must be filed by the taxable status date, usually March 1, which the assessor can confirm for a given community.
The Association’s summary does not describe an application form or procedure for the new tier. It does give the schedule that decides which bills benefit. The July 1, 2026 final rolls determine 2027 taxes, and the July 1, 2027 rolls determine 2028 taxes,.
Because the exemption is mandatory but the paperwork is local, the practical step is a call or visit to the assessor’s office before the winter.
A bill in Albany would loosen the tests
The tests could still change. Assembly bill A10839, introduced April 1, 2026 by Assemblymember Hawley and referred to the Committee on Real Property Taxation, would remove the requirements that the disability be permanent and total, that the veteran be rated individually unemployable and that the veteran receive or apply for federal housing assistance. It would also lower the VA rating requirement from 100 percent to any VA disability rating.
The bill has not been enacted. It does not alter the law that takes effect for rolls finalized after October 1, 2026, and the four tests described above are the ones an assessor applies today.
For a veteran who meets them, the open question is whether the home is on the roll with the exemption in time for the first bill that carries it. For a veteran who falls short of one test, the question becomes which other exemption or credit fits the home.
Does the veteran at home meet all four tests?
One missed test, such as a VA rating that falls short of 100 percent or no housing grant eligibility, can leave a home on the roll with a partial exemption or none, and a late filing can push the saving back a full tax year.
The Senior Property Tax & Home-Cost Relief Kit lays out the 5 kinds of property-tax relief, so a household that misses the full exemption can see what else may apply to the same home. It also includes an application log and renewal calendar, which tracks each filing date and renewal for every exemption a household holds.
Get the property-tax relief kit with the application log and renewal calendar for this home →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
