Indiana Disabled Veteran Property Tax Exemption: Deductions and Filing

Indiana’s disabled veteran property tax exemption is actually three separate deductions, and which one you can claim depends on when you served, whether your disability is service-connected, your disability rating, your age, and how you came to own your home. The largest flat deduction takes $24,960 off your home’s assessed value. A second removes $14,000. A third can wipe out your property tax bill entirely if a nonprofit gave you the home. The rules differ in ways that catch people, so it’s worth reading each one before you file.

The $24,960 Deduction for Wartime Veterans

This is the biggest flat-dollar deduction, and it’s the one most Indiana veterans with a service-connected disability will want. Under Indiana Code 6-1.1-12-13, you qualify if all four of these are true:¹

You served in the U.S. military during a recognized period of war.
You received an honorable discharge, documented on your DD-214 or equivalent.
You have a service-connected disability of at least 10%, rated by the U.S. Department of Veterans Affairs and shown on a VA pension certificate, compensation award, or disability compensation check.
You own the home, or are buying it under a recorded contract, on the date you file.

The wartime requirement is the sticking point. A peacetime veteran with a 10% service-connected disability does not qualify here, even though the disability came from service. There is no cap on the property’s assessed value for this deduction.² A $500,000 home gets the same $24,960 reduction as a $150,000 one.

The $14,000 Deduction for Totally Disabled or Older Veterans

Indiana Code 6-1.1-12-14 offers a smaller deduction with looser service requirements.³ You qualify if you served at least 90 days (wartime not required), received an honorable discharge, and either:

Are totally disabled, at any age, or
Are at least 62 with a disability rating of 10% or more.

The important difference from the $24,960 deduction: the disability does not have to be service-connected. A veteran who became totally disabled in a car accident years after leaving the military can qualify, as long as the other requirements are met.² You still need documentation, either from the VA or a certificate from the Indiana Department of Veterans Affairs.

This deduction has a property value cap. For the January 1, 2024 assessment date and every assessment date after, the home’s assessed value cannot exceed $240,000.³ If your home is assessed above that, you can’t claim it. Pending legislation (House Bill 1156) would remove the cap for assessment dates after December 31, 2026.

The Percentage Deduction for Donated Homes

Indiana Code 6-1.1-12-14.5 works differently. Instead of a flat dollar amount, it removes a percentage of the entire assessed value based on your disability rating:⁴

100% disabled: 100% of assessed value, meaning no property tax.
90–99%: 90% of assessed value.
80–89%: 80%.
70–79%: 70%.
60–69%: 60%.
50–59%: 50%.

The catch is narrow eligibility. The home must have been donated to you at no cost by a tax-exempt organization, such as a charity that builds homes for wounded veterans. You also must have served at least 90 days, been honorably discharged, and have a disability rating of at least 50%. If you claim this deduction, you can’t also claim the $24,960 or $14,000 deduction on the same property for the same assessment date.

Which Deduction to Choose

Some veterans qualify under more than one statute but can only use one on a given property in a given year. A quick way to sort it out:

Wartime service plus a service-connected disability of 10% or more: go with the $24,960 deduction. It’s larger and has no property value cap.
Age 62 or older with a disability of 10% or more from any cause, and a home assessed at $240,000 or less: the $14,000 deduction.
Totally disabled from any cause, home assessed at $240,000 or less: the $14,000 deduction.
A tax-exempt organization donated your home and you have a rating of 50% or more: the percentage deduction, which will almost always beat the flat amounts.

A wartime veteran who is totally disabled and owns a modestly assessed home technically meets both flat-dollar statutes. The $24,960 deduction wins in nearly every case.

Surviving Spouses

A surviving spouse can keep receiving the deduction after the veteran’s death. Under IC 6-1.1-12-13, you qualify if the deceased veteran met the wartime service, honorable discharge, and service-connected disability requirements at the time of death and you own or are buying the property.¹ The property doesn’t have to have been the veteran’s; it can be a home you owned in your own name.

IC 6-1.1-12-14 reaches further. Beyond spouses of veterans who qualified for the $14,000 deduction, it also covers spouses of service members killed in action, who died on active duty, or who died during inactive duty training.⁵

What Property Qualifies

All three deductions apply only to your primary Indiana residence. Investment properties, vacation homes, and rentals do not qualify.

The deduction isn’t limited to a traditional house. Mobile homes and manufactured homes not assessed as real property qualify too, as long as you own the home or are buying it under a contract that requires you to pay the property taxes.¹ For a contract purchase, the contract or a memorandum of it must be recorded with the county recorder. If you have sold property under a contract where the buyer pays the taxes, you cannot claim the deduction against that property.

How to Apply

The two main forms are State Form 51186 (Certificate of Eligibility for Property Tax Deductions for Disabled Veterans) and State Form 12662 (Application for Tax Deduction for Disabled Veteran and Surviving Spouses of Certain Veterans). Both are available from the Indiana Department of Veterans Affairs.⁶

Along with the application, gather:

Your DD-214, showing service dates, branch, and discharge status.
VA disability documentation: a pension certificate, compensation award letter, or disability compensation records showing your rating.
A certificate of eligibility from the Indiana Department of Veterans Affairs, if you don’t have VA documentation on hand. The state agency can issue one after verifying your disability.¹
Your property tax identification (parcel) number, from a prior tax bill or the county assessor’s website.

File with the county auditor in the county where the property sits. Most offices accept filings in person or by mail. The deduction shows up on the following year’s tax bill after approval. For example, an application filed on or before January 15, 2026 would apply to the 2025 Pay 2026 bill.⁷

Once approved, you generally don’t reapply each year. The deduction carries forward automatically. File again only if you buy a new home, change your primary residence, or your eligibility status changes.

If Your Application Is Denied

Most denials come down to missing paperwork rather than actual ineligibility. Before appealing, check that your VA disability documentation and DD-214 were included and that the disability percentage on your paperwork matches what you claimed on the application.

If the application is genuinely denied or the deduction isn’t applied, you can challenge it through the property tax appeal process. Start with Form 130 (Taxpayer’s Notice to Initiate an Appeal), filed with the local assessing official. For deduction denials, use the objective appeal section on page 2 of Form 130, and note that you can file for up to three prior years of assessments.⁸ The appeal begins with an informal conference and, if not resolved, moves up through the county Property Tax Assessment Board of Appeals, the Indiana Board of Tax Review, and ultimately the Indiana Tax Court. If an appeal produces a refund, you’ll also file Form 17T.

1
Indiana General Assembly. Indiana Code 6-1.1-12-13 – Deduction for Veteran With Partial Disability
2
Department of Local Finance. Indiana Department of Local Finance – Frequently Asked Questions Veterans Deductions
3
Indiana General Assembly. Indiana Code 6-1.1-12-14 – Deduction for Totally Disabled Veteran or Veteran Age 62 and Partially Disabled
4
Indiana General Assembly. Indiana Code 6-1.1-12-14.5 – Deduction for Disabled Veteran
5
Indiana Department of Veterans Affairs. Disabled Veteran Property Tax Deduction
6
Indiana Department of Veterans Affairs. Indiana Veteran Benefit Forms
7
Department of Local Government Finance. Deductions and Credits
8
Department of Local Government Finance. Appeals Property Tax