Colorado Veterans Property Tax Exemption: Eligibility and Application

Colorado’s Disabled Veterans Property Tax Exemption

Colorado provides a significant property tax benefit for veterans with 100% permanent and total (P&T) service-connected disability ratings through the Disabled Veterans Exemption established under Article X, Section 3.5 of the Colorado Constitution. The exemption shields 50% of the first $200,000 of the property’s actual value from property taxation — a maximum exemption of $100,000 in assessed value. For veterans in Colorado’s appreciating real estate markets, this exemption produces $500–$700+/year in annual property tax savings that compounds over years of ownership.

How Colorado’s Property Tax System Works

Colorado’s residential property tax calculation has two steps: the county assessor determines the property’s actual value (market value), then applies the residential assessment rate (6.765% in 2025) to produce the assessed value. Mill levies (expressed as mills per $1,000 of assessed value) are then applied to the assessed value to calculate the tax bill. The Disabled Veterans Exemption reduces the actual value by up to $100,000 before the assessment rate and mill levy are applied.

Example: a $450,000 Colorado home owned by a 100% P&T veteran. Without exemption: actual value $450,000 × 6.765% assessment rate = $30,443 assessed value × 80 mills (representative combined levy) = $2,435/year. With exemption: actual value reduced by $100,000 = $350,000 × 6.765% = $23,678 assessed value × 80 mills = $1,894/year. Annual savings: $541.

Annual Savings at Major Colorado Military Markets

Colorado’s combined mill levies vary significantly by location — urban areas near major employers and school districts tend to have higher combined levies. Representative 2025 savings from the $100,000 actual value exemption at current assessment rates:

• El Paso County (Colorado Springs, near Fort Carson and Peterson SFB): Combined levy approximately 70–90 mills → assessed value savings = $100,000 × 6.765% × levy = $6,765 assessed value × 70–90 mills = $474–$609/year savings
• Pueblo County (near Fort Carson training areas): Approximately 80–100 mills → $541–$677/year savings
• Denver County: Approximately 85–105 mills → $575–$710/year savings
• Adams County (near Buckley SFB): Approximately 80–100 mills → $541–$677/year savings
• Larimer County (Fort Collins, near Army Reserve facilities): Approximately 75–95 mills → $507–$642/year savings
• Jefferson County (west Denver suburbs): Approximately 70–90 mills → $474–$609/year savings

For veterans owning homes valued below $200,000 (less common in Colorado’s major metro areas but present in smaller cities and rural communities), the 50% of actual value exemption provides proportionally higher coverage — 50% of a $150,000 home’s actual value = $75,000 reduction, representing half the total property value shielded from taxation.

Eligibility Requirements

Disability rating: 100% permanent and total (P&T) service-connected disability from the VA. The P&T designation is required — a 100% rating that is not permanent and total, or a scheduler 100% (100% by schedular rating without an individual unemployability determination) may or may not meet Colorado’s specific statutory language. Review your VA award letter with the county assessor’s office to confirm qualification.

Ownership and occupancy: Must own the Colorado property and occupy it as your primary residence as of January 1 of the application year. The property must be in Colorado.

Colorado residency: Must be a Colorado resident. Active duty servicemembers stationed in Colorado but domiciled elsewhere must establish Colorado residency to qualify.

Surviving spouse: The surviving spouse of a qualifying veteran who died on or after January 1, 2009 may be eligible to continue the exemption if they have not remarried and meet other statutory criteria including that the spouse is 50% or more disabled, or is providing care for a disabled person in the household. The surviving spouse qualification has specific additional requirements — verify with the county assessor.

Application Process

Apply at the county assessor’s office in the county where the property is located. Colorado processes exemption applications with an annual deadline — applications must typically be submitted by July 1 of the year for which you want the exemption to apply. Some counties may have different specific deadlines; confirm with your county assessor. Required documentation: VA award letter confirming 100% P&T service-connected disability, proof of Colorado residency (driver’s license or state ID at the property address), and proof of property ownership.

Annual reapplication: Colorado requires annual renewal of the exemption by the applicable deadline to maintain the benefit. Set a calendar reminder each year — the exemption does not continue automatically. Missing the annual renewal deadline means losing the exemption for that tax year and potentially receiving a tax bill without the reduction applied.

Military Retirement Pay Tax Exemption in Colorado

Separate from the property tax exemption, Colorado exempts military retirement pay from Colorado state income tax for qualifying veterans. Under Colorado Revised Statute 39-22-104(4)(f), military retirement pay received by veterans who retired under 10 USC Chapter 65 (regular retirement after 20+ years), 10 USC Chapter 61 (disability retirement), or who receive retirement pay from reserve component service is exempt from Colorado income tax. For a military retiree receiving $48,000/year in retirement pay, Colorado’s income tax exemption saves approximately $1,800–$2,800/year in state income taxes (depending on total income and applicable brackets). Combined with the property tax exemption, Colorado’s total veteran tax benefit package is competitive with comparable states for military retirees.