For the first time, New Mexico is giving a property tax break to every veteran with a service-connected disability rating, not just those rated 100% and permanently and totally disabled. The change takes effect with the 2026 tax year and follows a constitutional amendment that New Mexico voters approved in November 2024.
What changed
Under the old rules, a disabled veteran needed a 100% VA disability rating to qualify for a property tax exemption on a primary residence; anyone rated below that got nothing beyond the modest standard veteran exemption. The new law replaces that all-or-nothing approach with a sliding scale, according to the Veterans and Military Families Caucus: a veteran's exemption is now calculated in direct proportion to their VA disability rating. A veteran rated 70% disabled gets a 70% reduction in the taxable value of their home, a veteran rated 30% gets 30%, and so on, down to a 10% rating.
The standard exemption available to every honorably discharged veteran, disabled or not, also grew significantly, rising from $4,000 to $10,000 in taxable value, with automatic annual increases tied to inflation going forward.
How to claim it
The exemption isn't automatic. Veterans apply through the New Mexico Department of Veterans Services, which verifies eligibility and issues a Certificate of Eligibility. That certificate then has to be filed with the veteran's county assessor's office to actually reduce the tax bill, and assessors work on annual valuation cycles, so veterans who haven't applied yet should check their county's filing deadline soon rather than waiting for a tax bill to arrive.
A bigger shift in veteran property tax relief
Most states now offer disabled veterans some form of property tax relief, but the size and structure of that relief varies enormously, from partial exemptions to full exemptions capped at a 100% rating. New Mexico's shift to a proportional model puts thousands more disabled veterans, those rated below 100%, in a position to get real relief on their home for the first time.
For veterans and military families weighing a move, or already living in the state, this kind of state-by-state variation is exactly why it's worth checking local benefits directly rather than assuming coverage carries over from one state to the next. Operation WarriorFit maintains a state-by-state guide to help, including a page on New Mexico veteran benefits.
If you're an eligible veteran, service member, or first responder facing entry fees for a race instead of a tax bill, that's a barrier Operation WarriorFit was built to remove. Check your eligibility for a free race entry today.