Arizona Disabled Veteran Property Tax Exemption 2026 (HB 2792)

Arizona's 2026 Disabled Veteran Property Tax Exemption: What HB 2792 Actually Changed

By Mike Certo, Cornerstone First Mortgage · NMLS #260555 · Updated May 23, 2026

Arizona Disabled Veteran Homeownership Hub

HB 2792 is the centerpiece, but it's one of several disabled-vet benefits that affect your home purchase or refinance. Everything tied to your service-connected rating, organized:

Tax savings (annual)

HB 2792 property tax exemption (this page, below)
HB 2792 savings calculator

Closing-cost savings (one-time)

VA funding fee waiver (10%+ rating)
Funding fee calculator

Income / DTI advantages

Disability gross-up calculator (25% tax-free income lift)
Residual income calculator

Down-payment help

DPA + VA stacking (most veterans don't need DPA, but some do)

Surviving spouse continuity

Surviving spouse VA loan guide
HB 2792 transfers to surviving spouse — see below

Deep-dive blog content

The 60-second answer (HB 2792 specifically)

Arizona House Bill 2792, signed by Governor Hobbs on February 12, 2026, rewrote the state's disabled-veteran property tax exemption. The two big changes: the exemption now attaches to your primary residence (instead of "property" in general, which the state constitution wouldn't allow), and the assessed-value cap that had effectively zeroed out the benefit for most homeowners is gone for 100% service-connected vets. That sounds technical. The plain version: if you have a 100% VA disability rating and you live in Arizona, your county won't bill you property tax on your home starting in tax year 2026.

For most Phoenix-area vets, that's between $1,800 and $4,500 a year that stays in your pocket. For a Scottsdale vet at the high end of home values, it can be $8,000+.

Who qualifies in 2026?

To qualify for the full exemption under HB 2792 you need to meet four conditions:

Honorable discharge from any branch of the U.S. military
100% service-connected disability rating documented on your VA Summary of Benefits letter
Arizona resident (your AZ driver's license, voter registration, and tax filings should all show AZ residency)
The property is your primary residence — not a rental, not a vacation home, not a second home

Partial-disability vets (rated below 100%) qualify for a proportional exemption against the new $4,873 assessed-value baseline for tax year 2026. The math: if you're rated 60% disabled, you get 60% of $4,873 = $2,924 of assessed value exempted. That's a smaller dollar number — the full exemption is the breakthrough.

There's also an income test for partial-disability claims, and it still applies. The income limits for 2026 are:

Household	Annual income cap
No children under 18 in the home	$39,865
With at least one minor or disabled child in the home	$47,826

The income that gets counted explicitly excludes Social Security benefits, military pensions, and VA disability payments. Most disabled vets stay well under the limit once you remove those three buckets.

What actually changed vs the old law?

Before 2026, Arizona offered a disabled veteran exemption that was technically generous but practically useless. Here's what you were dealing with as a homeowner before HB 2792:

Rule	Pre-2026 reality	2026 (HB 2792)
Exemption tied to	Property (broad)	Primary residence (specific)
Assessed value cap (100% vets)	$4,476 max (TY 2025)	None
Assessment ceiling	Total assessment ≤ $31,347 or you lost the benefit	Cap eliminated for 100% vets
Joint ownership with spouse	Reduced the benefit proportionally	Treated as solely owned by eligible vet
Surviving spouse relocation	Lost exemption if you moved	Can relocate to new AZ primary residence and keep exemption

The pre-2026 ceiling — $31,347 assessment — translated to roughly a $300,000 home before you started losing the exemption. In a state where the median Phoenix home is $458,000 and Scottsdale is over $1 million, that meant the law existed on paper but applied to almost nobody.

The 2026 rewrite is the first time AZ has offered a property tax exemption that actually pays a meaningful number to disabled veterans across the full housing market.

How much will I actually save?

The exact number depends on your county and your home's assessed value. Arizona property is assessed at a Limited Property Value (LPV) by each county assessor, then a tax rate is applied. For owner-occupied primary residences, the effective tax rate runs about 0.42% in Scottsdale, 0.55% in Phoenix, and as high as 0.78% in Tucson.

Sample annual savings under the full exemption for 100% rated vets:

Home value	Phoenix (0.55%)	Scottsdale (0.42%)	Tucson (0.78%)	Sierra Vista (0.60%)
$300,000	$1,650	$1,260	$2,340	$1,800
$450,000	$2,475	$1,890	$3,510	$2,700
$600,000	$3,300	$2,520	$4,680	$3,600
$850,000	$4,675	$3,570	$6,630	$5,100
$1,200,000	$6,600	$5,040	$9,360	$7,200

For a Phoenix-area E-7 retiring from Luke AFB at 100% disability and buying a $475,000 home in Surprise, that's roughly $2,613 a year in cash flow that the new law freed up. Over a 10-year hold, that's $26,000+ in retained income — and it compounds against the rate you'd have paid on borrowed money.

How do I apply by county?

Application is annual. You don't apply once and forget it. The window varies slightly by county, but most operate under ARS § 42-11111 with the same general timeline: file between January 1 and February 28.

Maricopa County (Luke AFB, Phoenix metro)

Window: First Monday of January through March 1 each year
Extension: Available to September 1 with an approved Exemption Deadline Waiver
Where: Online via mcassessor.maricopa.gov, by mail, or by email
What to send: VA Summary of Benefits letter (must show 100% service-connected rating), AZDOR Certification of Disability for Property Tax Exemption form, proof of ownership (deed or property tax bill), proof of Arizona residency (AZ driver's license, voter card)
Contact: Maricopa County Assessor's Office, Personal Exemptions Division

Pima County (Davis-Monthan, Tucson)

Window: January 1 through February 28
Form: FOR-136 or equivalent
Where: asr.pima.gov or in-person at the Pima County Assessor's office in downtown Tucson
Note: Pima has the highest effective property tax rate in the state, so the exemption is worth more here per dollar of home value than anywhere else

Cochise County (Fort Huachuca, Sierra Vista)

Window: January 1 through February 28
Where: cochise.az.gov/assessor
Note: Online portal available; Cochise was an early adopter of digital filing

Yuma County (MCAS Yuma)

Window: January 1 through February 28
Where: Yuma County Assessor's office or mail; online filing limited

Pinal, Yavapai, Coconino, Mohave, and remaining counties

Same January 1 – February 28 window per state statute
Each county assessor maintains its own form
Cochise, Mohave, and Gila have published online portals; others still require mail or in-person filing

The application is short, but you need to bring the right documents. Showing up with anything less than your full VA Summary of Benefits letter — the one that explicitly shows your 100% service-connected rating, not just a disability percentage from another source — will get you turned away. The VA can issue a fresh copy through va.gov or your Patient Advocate at the nearest VA Medical Center.

What about surviving spouses?

HB 2792 carried forward and improved the surviving spouse provisions. As a surviving spouse of a 100% service-connected veteran:

You keep the full exemption as long as the property remains your primary residence
You can relocate to a different Arizona primary residence and keep the exemption (this is new under HB 2792 — pre-2026, moving wiped out the benefit)
You must not remarry; remarriage ends eligibility
You file annually, same window as veterans

Surviving spouses of partial-disability veterans (rated below 100%) qualify for the proportional exemption, with the same income limits that applied to the original veteran.

I just bought a home — do I get the exemption for this year?

The exemption attaches based on ownership and primary-residence status as of the assessment date for the tax year. For 2026, that means if you owned and occupied the home as your primary residence as of January 1, 2026, and you file by the deadline, you get the full year. If you bought mid-year, the rules get more nuanced — file as soon as your closing is complete and let the county assessor calculate the prorated benefit.

Two practical tips for vets who are still house-hunting:

If you're planning to buy in 2026, the timing of your closing doesn't change your eligibility for next year's tax year. Just make sure to file in the January-February window of 2027 for tax year 2027.
If you're a transferring active-duty member who will become an AZ resident later in 2026, document your residency change date carefully. The county assessor will want to see your AZ driver's license, voter registration change, and out-of-state license surrender date.

Does this work for VA-financed and conventional homes the same way?

Yes. The tax exemption is about ownership and residency, not about how you financed the home. A vet with a VA loan, FHA loan, conventional loan, or who paid cash all qualify on the same basis. The exemption shows up as a credit against your annual property tax bill from the county treasurer, not as a change to your mortgage payment.

That said: if your mortgage payment includes property taxes in escrow (most do), your lender will need a copy of the exemption approval to recalculate your escrow analysis and either lower your monthly payment or send you a refund check for the over-collected escrow. Don't expect this to happen automatically — call your servicer the same week your county approval comes through.

If you're financing a new home purchase in 2026 and qualify for the exemption, Mike will help you structure the escrow so you're not overpaying from day one. That's the kind of small math national lenders skip; it's worth a $200-$400 monthly difference for most disabled-vet borrowers.

What about the assessed value vs market value confusion?

This catches people every year. Your home's "market value" (what Zillow shows, what you'd sell for) and your home's "assessed value" (what the county uses for taxation) are different numbers in Arizona.

The county sets a Full Cash Value (FCV) and a Limited Property Value (LPV) for each parcel. LPV grows at a statutory cap (the lower of 5% or actual FCV growth) and is what most taxes get calculated against. For owner-occupied residences (Class 3 / Class 4.1), the LPV is multiplied by an assessment ratio (10%) to produce the assessed value. That assessed value is then multiplied by the county's combined tax rate to produce your bill.

For a $500,000 home in Phoenix, the math looks roughly like: - LPV: ~$425,000 (lags market by 18-24 months) - Assessment ratio: 10% - Assessed value: ~$42,500 - Combined tax rate: ~12% (varies by school district + city) - Annual property tax: ~$5,100 - Effective rate: ~1.02% of LPV / ~0.85% of market

Under the old law, an exemption capped at $4,476 of assessed value translated to about $537 of annual tax savings — meaningful but small. Under HB 2792 with no cap, the full $42,500 assessed value gets exempted for a 100% vet, dropping the bill to (essentially) zero.

The five-percent statutory cap on annual LPV increases is also a quiet superpower of the AZ system that gets less attention than the new vet exemption. California buyers especially should know: AZ's combination of low effective rates and the 5% LPV cap means your property tax bill won't spike unpredictably the way it can under California's bond-and-Mello-Roos additions.

How does this stack with other AZ disabled veteran benefits?

The property tax exemption is one piece of a larger Arizona disabled veteran benefits package. You can also access:

Vehicle registration fee exemption — 100% service-connected vets pay only the $8 base fee on one vehicle annually
State park entry waiver — free Arizona State Parks pass for 100% vets
Hunting and fishing license discount or waiver — depends on disability classification
AZ income tax exemption on military retirement pay — full exemption since tax year 2021
Property tax deferral programs — available to senior vets who don't qualify for the disability exemption but face hardship

These benefits don't conflict with each other or with federal VA benefits. They stack.

What if my application gets denied?

Denials happen for three predictable reasons:

Documentation problem — your VA letter doesn't explicitly state 100% service-connected, you forgot to include proof of AZ residency, or the property deed shows ownership in a different name
Residency question — the assessor concluded the home isn't your primary residence (often because you have a different mailing address on file)
Timing — you filed after the March 1 deadline without a waiver

For #1, fix the documentation and resubmit during the waiver window. For #2, provide proof of primary residency: utility bills in your name at the property address, your AZ voter registration, the HOA registration, anything that establishes you live there. For #3, request the Exemption Deadline Waiver — Maricopa County has been reasonably generous with these as long as the underlying eligibility is clear.

If you've been denied and the underlying eligibility looks airtight, the Arizona Department of Revenue handles formal appeals. The Disabled American Veterans (DAV) Arizona chapter also provides free advocacy for vets navigating these appeals.

Frequently asked questions

When does HB 2792 take effect?

The law was effective on signing (February 12, 2026) as an emergency measure. The first property tax bills that reflect the new exemption hit in October 2026 (the second-half AZ tax bill). The first-half 2026 bill (already mailed in September 2025) doesn't reflect the change.

Do I need to live in Arizona to qualify?

Yes. You need to be an Arizona resident with your primary residence in the state. Active-duty military stationed in AZ on PCS orders qualify for residency purposes once you formally establish AZ as your home of record (AZ driver's license, voter registration). Retired vets who relocated to AZ qualify once their residency is established.

What if I'm 90% disabled, not 100%?

You qualify for a proportional exemption — 90% of $4,873 assessed value = $4,386 assessed value exempted. That's worth roughly $450-$550 a year in property tax savings depending on your county's effective rate. The income test still applies for partial-disability claims. The full-exemption breakthrough in HB 2792 specifically benefits 100%-rated vets.

Can I apply if my wife (or husband) is on the deed too?

Yes. HB 2792 explicitly treats joint ownership with a spouse as if the home is owned solely by the eligible veteran. Pre-2026, joint ownership reduced the exemption proportionally — that's been fixed.

What if I sell my home and buy another one in AZ?

The exemption attaches to your primary residence at the time of assessment. If you sell and buy a different AZ primary residence, you file fresh for the new home. There's no transfer or "porting" mechanism, but as long as the new home is also your primary residence and you file in the January-February window, you get the exemption on the new property starting the next tax year.

Does this exemption follow me to other states?

No. Arizona's property tax exemption applies only to AZ property tax. Other states have their own disabled veteran benefits — some better, some worse. If you're considering retiring to AZ specifically for these benefits, the math usually pencils strongly against most other states (especially California, Oregon, Washington, and Illinois).

Where do I find my VA Summary of Benefits letter?

Log in to va.gov, go to your profile, and download the Summary of Benefits letter from the disability compensation section. If your VA login doesn't work, call 1-800-827-1000 or visit your nearest VA Medical Center's Patient Advocate office. The letter must explicitly show 100% service-connected disability rating — a percentage from another VA document (like a rating decision) is not the same thing.

What I'd do if I were you

If you're already living in Arizona with a 100% rating and you're not currently claiming the exemption — start the application this month. Call your county assessor or download the form online today. You can backfile for tax year 2026 right now (Maricopa accepts late applications with the waiver through September). That single afternoon of paperwork is worth $2,000-$8,000 to most vets.

If you're house-shopping in Arizona right now and you qualify under the new law, the exemption fundamentally changes your buying math. A $500,000 home in Phoenix that would have cost you $2,750 a year in property tax now costs you $0 — that's roughly $230/month back in your pocket, equivalent to an extra $45,000 in purchasing power at current VA rates. Most national lenders won't catch this and won't adjust their pre-approval math accordingly. We will.

If you're a transferring active-duty member who will retire in AZ in the next few years, plan your retirement state of residence with HB 2792 in mind. AZ wasn't the obvious choice for 100% disabled vets before 2026. It absolutely is now.

Sources and authority

This page summarizes Arizona tax law as of May 23, 2026 for general information purposes only. Tax law changes; verify current rules with your county assessor (Maricopa County Assessor, Pima County Assessor, etc.) or the Arizona Department of Revenue before filing. Citations to specific statutes — ARS § 42-11111, HB 2792 (effective Feb 12, 2026), SB 1268 — are linked above for verification. Mike Certo is a mortgage loan originator, not a tax advisor, CPA, or attorney. For tax planning, eligibility verification, or strategic decisions specific to your situation, consult a licensed Arizona CPA, enrolled agent, or attorney. NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender.