What Is Disability Exemption
A disability exemption reduces your property's assessed value if you or a co-owner has a qualifying physical or mental disability. The exemption amount varies by state, typically ranging from $25,000 to $75,000 off your assessed value, though some states offer percentage-based reductions instead. This lowers your annual property tax bill without requiring you to sell or refinance.
Eligibility Requirements
Most states require you to meet three conditions. First, you must own the property as your primary residence (though some states allow disabled renters to claim exemptions through their landlords). Second, you or a spouse must have a documented disability from a physician, typically including conditions like mobility impairments, chronic illness, blindness, or hearing loss. Third, you must apply before a specific deadline, usually between January 1 and March 31 each year, though some counties allow year-round applications with the exemption taking effect the following tax year.
States like Illinois, Indiana, and Ohio require Social Security Disability Insurance (SSDI) status or Veterans Affairs (VA) disability compensation as proof. Others accept medical documentation from any licensed physician. Check your county assessor's office for the exact documentation they accept.
Application Process
- File an exemption application with your county assessor or board of review, not your local tax collector
- Submit medical certification (typically a standard form your doctor completes in under 10 minutes)
- Include proof of ownership, such as a deed or mortgage statement
- Pay any required filing fee, usually $10 to $50
- Expect a decision within 30 to 90 days; some counties process same-year, others apply the exemption the following tax year
Impact on Your Assessment
The exemption reduces your assessed value, not your tax rate. If your home is assessed at $300,000 and you receive a $50,000 disability exemption, the assessor calculates taxes on $250,000 instead. In a jurisdiction with a 1.2% effective tax rate, this saves you approximately $600 annually. The exemption persists year to year unless you move, sell, or lose eligibility.
You can stack a disability exemption with other exemptions like homestead exemptions in most states. For example, Ohio allows both together. However, you cannot exceed 100% exemption value on your home. If your homestead exemption already covers $60,000 and your disability exemption is $50,000, the assessor applies only the homestead.
Common Questions
- Does the exemption stay if I later refinance or take out a home equity loan? Yes. The exemption is tied to your disability status and ownership, not your mortgage. Refinancing does not affect it. However, if you sell and buy another home, you must reapply in your new county.
- What happens if I appeal my assessment at a board of review hearing? The exemption and the assessed value are separate issues. You can contest the assessment before a board of review hearing and also claim an exemption. If you win the assessment appeal, your exemption applies to the new lower value. If the board rejects your exemption claim, you can appeal that decision to circuit court in some states within 30 days.
- Do I lose the exemption if my disability improves? Most states require annual recertification or periodic reapplication, typically every 3 to 5 years. If you no longer qualify medically, notify your assessor to avoid penalties. Some jurisdictions impose back taxes plus interest if you claim an exemption you don't qualify for.