"Buying a Home in Arkansas as a Disabled Veteran: Do You File the Property Tax Exemption or the Homestead Credit?"

The settlement statement at a closing in Jacksonville, a few miles from Little Rock Air Force Base, carries one property tax line, and it is the seller's bill divided to the day. The seller registered the homestead credit years ago, and that credit is inside the figure. You are a veteran with a 100 percent permanent and total rating, the keys are in your hand, and the county does not know that yet. Until you tell the collector, that bill is the one your new escrow account is built on.

In Arkansas, a veteran with a service-connected 100 percent total and permanent disability is exempt from all state property tax on the homestead under Ark. Code § 26-3-306. That exemption takes the place of the Amendment 79 homestead credit rather than stacking on it. You claim it with your county collector after closing, with a letter from the VA, and it reaches your escrow once the county's bill shows it.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including Arkansas.

The exemption, and the property it covers

Ark. Code § 26-3-306 covers a veteran the Department of Veterans Affairs has awarded special monthly compensation for the loss, or loss of use, of one or more limbs, or for total blindness in one or both eyes. It also covers a veteran with a service-connected 100 percent total and permanent disability. That veteran is exempt from payment of all state taxes on the homestead and on the personal property they own. My Arkansas VA loan page covers who qualifies.

Your homestead is the home you live in as your main residence. At the qualifying level the whole real estate tax on that home comes off your bill, and so does the personal property tax on what you own, your vehicles mostly.

The Saline County Collector's page on the exemption says rental property, special improvement taxes, city liens, sanitation charges, timber and land-only parcels do not qualify.

Does the Arkansas disabled veteran exemption stack with the homestead credit?

No. You hold one or the other, and the exemption is the larger of the two.

My article on the Arkansas homestead credit when you buy tells every Arkansas client to register that credit after closing. The credit is a fixed dollar figure that comes off the bottom of the real estate tax bill. A qualifying veteran is the exception to that advice, because the exemption removes the tax the credit would have come off of.

Saline County states it directly: the veteran or widow is not eligible for the Amendment 79 Homestead Credit or the Over 65 Freeze as long as they are receiving the disabled veteran exemption, which the county calls the DAV exemption. If you file the homestead credit at the assessor's office the way the standard advice says to, and never take your VA letter to the collector, you have chosen the smaller benefit.

The two benefits also live in two different offices. The Commissioner of State Lands' Veterans Guide to Property Taxes sends you to the county assessor for the homestead credit, and the Arkansas Department of Veterans Affairs guide sends you to the county collector for the disabled veteran exemption.

The over-65 freeze, and why the exemption already covers it

If you are 65 or older, or disabled, Arkansas also lets you freeze the assessed value of your homestead. Assessed value is the share of the county's appraised value the tax is figured on, twenty percent in Arkansas. The Assessment Coordination Division at the Department of Finance and Administration explains that the freeze holds that value at the next assessment date after you turn 65 or become disabled. You apply with the county assessor, and one owner's freeze does not pass to the next owner of the same home.

While you have the veteran exemption, the freeze does nothing extra for you, because there is no tax left on the value it would have held still. If you qualify for the exemption, that is the one to claim.

Claiming it after closing, and whose name has to be on which record

You apply at your county collector's office, which is where the Arkansas Department of Veterans Affairs sends you. The collector needs a letter from the VA verifying your compensation or your rating, and the counties call that document the Summary of Benefits letter. Pope County's collector says to bring that letter in.

Your name has to be on two county records before the exemption goes on. Saline County's collector and Pope County's both say the veteran or widow must appear on the personal property assessment and on the title, and must be listed as the owner of the real estate. Pope County adds that you have to be occupying the home. The deed in your name has to reach the county's record, and your vehicles have to be assessed in your own name.

I would take it in this order.

1. Please ask your closing agent for the recording information for your deed, and for a copy of the settlement statement.
2. Please visit the county assessor first. You report the new use of the home, meaning that you now live in it as your main residence, which the homestead credit article walks through, and you assess your personal property in your own name.
3. Then please take your Summary of Benefits letter from the VA, the recording information for your deed and your settlement statement to the county collector. That is the office that applies the exemption.
4. Please ask the collector to prorate the current year. The section on the year you close explains why.
5. Please ask whether the collector wants the letter again next year.

Do I have to send the VA letter to the collector every year?

For years nobody could say whether the letter was due every year. Arkansas Attorney General Opinion 2010-093 found the statute silent on whether the letter had to be supplied annually.

Pope County states that the Summary of Benefits is due by October 15 and must be turned in annually, and Washington County states the same annual October 15 deadline.

Act 876 of 2025 amended § 26-3-306 and settled it. You give the collector the letter once. After that you tell the collector when your eligibility changes, or when the ownership, the use or the occupancy of the home changes. A new home means a new letter, so you bring one for the home you just bought.

My advice is to ask your collector which practice that office is following. A county that still runs the annual deadline will take the exemption off if the letter does not arrive, and the first you hear of it is a tax bill.

The year you close: proration, the seller's bill and your escrow

Your share of the closing year is prorated. Under § 26-3-306, when a qualifying veteran sells or buys a homestead the exemption is prorated to the date of the sale. Your exempt share of the year begins on your closing date, and the seller's share before it is still taxed. The collector makes the record entries to carry out the proration when you ask. Washington County's collector says that if you are selling or buying a homestead, you give the office your settlement papers, and the taxes are prorated for the time of ownership.

Arkansas bills a year behind, and the bill the county has on the home when you close is the seller's bill, with the seller's credit inside it.

Your escrow account collects a twelfth of the projected tax bill each month and pays the county when the bill comes due, and the lender projects that bill from what the county has on the home. The same tax figure is inside the payment I qualify you on, because Fannie Mae's Selling Guide section B3-6-03 defines the monthly housing expense as principal, interest, real estate taxes, insurance and association dues together. My article on what happens to your property taxes after you buy covers that projection. The escrow is built from what the county bill actually says, and the county bill does not say "exempt" until the collector has your letter and your name is on both records.

Please provide your Summary of Benefits letter from the VA, all pages, please. We will need it in the file at application so the exemption is documented from the start. Once the county's record shows the exemption, the escrow catches up at the next analysis by your servicer, the company that collects your mortgage payment. Washington County's collector tells the veteran or widow to submit the Summary of Benefits letter to the mortgage company as well. How an escrow account is analysed each year covers how a surplus is returned and how the monthly deposit comes down.

A surviving spouse or minor child buying a home

If you are the surviving spouse or a minor dependent child of a disabled veteran, the exemption continues for you. Under § 26-3-306, on the death of the disabled veteran, the surviving spouse and minor dependent children are exempt from all state taxes on the homestead and personal property they own, as long as they are citizens and residents of Arkansas. The Arkansas Department of Veterans Affairs guide adds that the spouse and minor children of a service member killed within the scope of military duties, or declared missing in action, are exempt in the same way.

Saline County's FAQ states that the widow must remain unmarried, or a later marriage must have ended, to keep receiving the benefit. The county path is the same as for the veteran: the surviving spouse's name on the deed and on the personal property assessment, a letter from the VA, and the collector's office.

Mistakes that leave the tax line in the payment

Filing the homestead credit and stopping there. The assessor registers the credit, but the collector never sees your Summary of Benefits letter, so the exemption that would have removed the whole bill is never applied.

Assessing personal property in a spouse's name only. Saline and Pope counties both want the veteran's name on it.

An illustration

The numbers below are made up to show the mechanism.

A client with a 100 percent permanent and total rating closes in the middle of August on a home in Benton, in Saline County. The seller's bill, with the seller's homestead credit inside it, is $2,400, and the escrow is set up on that figure at closing. In September the client tells the assessor he now lives in the home as his main residence, assesses his truck in his own name, and takes his Summary of Benefits letter and settlement statement to the collector. The collector prorates the year, so the seller's share through the closing date is still taxed and the client's share from closing on is exempt.

Seller's bill the escrow was set up on                 $2,400 a year
Monthly tax deposit at closing                           $200 a month

Closing year, after the collector prorates
Seller's share, January through mid-August, taxed      $1,500
Client's share, mid-August through December, exempt        $0

First full year in the client's name
Real estate tax on the homestead                           $0
Monthly tax deposit after the next escrow analysis         $0

The $2,400 was the seller's number. Once the collector's record shows the exemption, your servicer's analysis returns the surplus and drops the monthly deposit.

Your next step in Arkansas

If you are buying in Arkansas with a qualifying rating, choose a rate option and you will see pricing for your situation, your debt ratio and closing costs priced for Arkansas. No credit pull, no account, nobody calls you, and the selection can change.

If you want a pre-approval letter in hand before you write an offer, an Arkansas pre-approval is where the rating letter, the income and the credit get reviewed. The Arkansas mortgage page covers what is different about a closing here, and veteran property tax relief by state shows how Arkansas compares. If you want to talk it through, you are welcome to call me.

Nothing here is a loan approval, a denial, a commitment to lend, or tax or legal advice. Your county decides what the collector requires, so please confirm it with that office.

Common questions

Can I get both the Arkansas disabled veteran exemption and the homestead tax credit?

No. The Saline County Collector states that a veteran or widow receiving the disabled veteran exemption is not eligible for the Amendment 79 Homestead Credit or the Over 65 Freeze. The exemption under Ark. Code § 26-3-306 removes the state tax on the homestead, and the credit is a fixed dollar amount off a tax bill.

Where do I apply for the Arkansas disabled veteran property tax exemption after buying a home?

At your county collector's office, with the VA's Summary of Benefits letter. Saline and Pope counties also require that you appear as owner on the real estate record and on the personal property assessment.

Do I have to send my VA letter to the Arkansas county collector every year?

Under Act 876 of 2025, which amended § 26-3-306, you give the collector the VA letter once. After that you tell the collector when your eligibility changes or when the ownership, use or occupancy of the home changes, and you bring a new letter when you move to a new home. Pope County and Washington County still publish an annual October 15 deadline, so please ask your own collector which practice it follows.

Does the seller's disabled veteran exemption transfer to me when I buy the home?

No. The exemption belongs to the qualifying veteran, and § 26-3-306 prorates it to the date of sale, so the seller's exempt share of the year ends at closing. If you qualify yourself, your own exempt share begins there.

Does a surviving spouse keep the Arkansas veteran property tax exemption on a new home?

Under § 26-3-306, the surviving spouse and minor dependent children of a disabled veteran are exempt from all state taxes on the homestead and personal property they own, if they are citizens and residents of Arkansas. Saline County states that the widow must remain unmarried, or a later marriage must have ended.

Will the exemption lower my mortgage payment right away?

Not on its own. The escrow at closing is set from the bill the county has on the home, which is the seller's bill until the collector has your letter and your name is on both county records. Once the record shows the exemption, the company that collects your mortgage payment runs its escrow analysis, returns the surplus and drops the tax deposit.