Title of Regulation: 1VAC80-10. Disabled Veteran Real Property Tax Exemption (adding 1VAC80-10-10 through 1VAC80-10-100).

Statutory Authority: § 58.1-3219.7 of the Code of Virginia.

Effective Date: September 18, 2017.

Agency Contact: Carrie Ann Alford, Director of Policy and Planning, Department of Veterans Services, 101 North 14th Street, 17th Floor, Richmond, VA 23219, telephone (804) 225-4716, or email carrieann.alford@dvs.virginia.gov.

Summary:

The regulation establishes the requirements of the application process and implementation of the real property tax exemption for 100% disabled veterans and their surviving spouses.

CHAPTER 10
100% DISABLED VETERAN REAL PROPERTY TAX EXEMPTION

1VAC80-10-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Commissioner" means the Commissioner of the Department of Veterans Services.

"Department" means the Virginia Department of Veterans Services.

"Dwelling" means the single structure, including any permanent attachments thereto, that is the principal place of residence of the qualifying veteran or surviving spouse.

"Exemption" means the exemption from real property taxes authorized by subdivision (a) of Section 6-A of Article X of the Constitution of Virginia and § 58.1-3219.5 of the Code of Virginia.

"Qualified veteran" is a veteran who has been rated by the U.S. Department of Veterans Affairs, or any successor agency, to have a 100% service-connected, permanent, and total disability. If a 100% disability rating is not permanent (i.e., has not been finally adjudicated or is scheduled to be reviewed at a future date), the exemption does not apply.

"Real property" is land and anything growing on it, attached to it, or erected on it, excluding anything that may be severed without injury to the land, and the dwelling occupied by the qualified veteran or surviving spouse.

"Surviving spouse" is a spouse of any member of the armed forces of the United States as determined by the U.S. Department of Defense, who has been rated by the U.S. Department of Veterans Affairs, or any successor agency, to have a 100% service-connected, permanent, and total disability.

"VA" means the U.S. Department of Veterans Affairs or any successor agency.

1VAC80-10-20. Real property exempt from taxation.

A. The dwelling that is the principal residence of a qualified veteran, plus up to one acre of land, or more than one acre if a given locality has exempted such larger acreage pursuant to § 58.1-3210 of the Code of Virginia, shall be exempt. The exemption extends to real property improvements other than a dwelling, including the land upon which such improvements are situated, so long as the principal use of the improvement is (i) to house or cover motor vehicles or household goods and other personal effects as classified in subdivision A 14 of § 58.1-3503 of the Code of Virginia and as listed in § 58.1-3504 of the Code of Virginia and (ii) for other than a business purpose.

B. Manufactured homes, as defined in § 46.2-100 of the Code of Virginia, whether or not the wheels and other equipment previously used for mobility have been removed, shall be exempt after the qualifying veteran has titled the home in the Commonwealth and shown proof of ownership. Sections 58.1-3219.5 and 58.1-3219.9 of the Code of Virginia are the only instances when manufactured homes may be classified as real property. If the veteran does not own the land on which the manufactured home is located, then the land is not exempt. The veteran or spouse must meet all other provisions of § 58.1-3219.5.

1VAC80-10-30. Full exemption; joint ownership; trusts.

A. The full exemption is authorized when the dwelling and land are held by a veteran alone or in conjunction with the veteran's spouse as tenant or tenants for life or joint lives. The exemption does not apply if the qualified veteran is not on the deed, except when the real property is held in one of the trusts listed in subsection B of this section.

B. The full exemption is authorized when the real property is held in one of the following trusts: (i) revocable inter vivos trust over which the veteran or the veteran and veteran's spouse hold the power of revocation or (ii) an irrevocable trust under which a veteran alone or in conjunction with veteran's spouse possesses a life estate or an estate for joint lives or enjoys a continuing right of use or support. The exemption does not apply to any other forms of trust or any interest held under a leasehold or term of years.

1VAC80-10-40. Partial exemptions.

A. If the veteran's 100% disability rating occurs after January 1, 2011, and the veteran owns a qualified primary residence on the date of the rating, then the tax exemption begins on the date of such rating.

B. If the qualified veteran acquires the property after January 1, 2011, then the exemption shall begin on the date of acquisition, and the previous owner may be entitled to a refund for a pro rata portion of real property taxes paid pursuant to § 58.1-3360 of the Code of Virginia.

1VAC80-10-50. Surviving spouse exemption.

A. The surviving spouse of a veteran eligible for the exemption shall also qualify for the exemption, so long as:

1. The death of the qualified veteran occurs on or after January 1, 2011;

2. The surviving spouse was married to the qualified veteran at the time of the veteran's death;

3. The surviving spouse does not remarry;

4. The surviving spouse continues to occupy the real property as the surviving spouse's principal place of residence; and

5. The veteran was eligible for the exemption at the time of the veteran's death. This exemption is available even if the qualifying veteran never requested the exemption.

B. The exemption for a surviving spouse includes real property (i) held by the veteran's spouse as tenant for life, (ii) held in a revocable inter vivos trust over which the surviving spouse holds the power of revocation, or (iii) held in an irrevocable trust under which the surviving spouse possesses a life estate or enjoys a continuing right of use or support. The exemption does not apply to any other forms of trust or any interest held under a leasehold or term of years.

1VAC80-10-60. Proration when not all owners qualify for the exemption.

In the event that the primary residence is jointly owned by two or more individuals, not all of whom qualify for the exemption pursuant to subsection A or B of § 58.1-3219.5 of the Code of Virginia, and no person is entitled to the exemption under this section by virtue of holding the property in any of the three ways set forth in subsection D of § 58.1-3219.5 of the Code of Virginia, then the exemption shall be prorated by multiplying the amount of the exemption or deferral by a fraction that has as a numerator the percentage of ownership interest in the dwelling held by all such joint owners who qualify for the exemption pursuant to subsections A and B of § 58.1-3219.5 of the Code of Virginia, and as a denominator, 100%.

1VAC80-10-70. Cooperative associations.

The exemption does not apply to property owned by a cooperative association or any other form of ownership in which the qualified veteran does not actually own the real property other than the trusts detailed in 1VAC80-10-30.

1VAC80-10-80. Qualified veterans and surviving spouses residing in hospitals, nursing homes, convalescent homes, or other care facilities.

If the qualified veteran or surviving spouse is residing in a hospital, nursing home, convalescent home, or other facility for physical or mental care for an extended period of time, the exemption will continue on the property so long as such real estate is not used by or leased to others for consideration.

1VAC80-10-90. Application.

A. A veteran claiming the real property tax exemption shall file with the Commissioner of the Revenue, or other assessing official, in the veteran's respective locality:

1. A summary of benefits letter issued by the VA, or its successor agency, indicating that the veteran has a 100% service-connected, permanent, and total disability;

2. An affidavit or application on a form provided by the locality that:

a. Sets forth the name of the veteran and the name of the spouse, if any, also occupying the real property;

b. Indicates whether the real property is jointly owned by two spouses; and

c. Certifies that the real property is occupied as the veteran's principal place of residence; and

3. Proof of residence occupancy acceptable to the applicable locality, such as a valid Virginia driver's license or other proof of residency acceptable to the locality.

B. A surviving spouse of a veteran claiming the real property tax exemption shall file with the Commissioner of the Revenue, or other assessing official, in the surviving spouse's respective locality:

1. A summary of benefits letter issued by the VA, or its successor agency, indicating that the veteran had a 100% service-connected, permanent, and total disability;

2. An affidavit or application on a form provided by the locality that:

a. Sets forth the name of the deceased veteran and the name of the spouse;

b. Indicates whether the real property is jointly owned by the two spouses; and

c. Certifies that the real property is occupied as the surviving spouse's principal place of residence;

3. Proof of residence occupancy acceptable to the applicable locality, such as a valid Virginia driver's license, or other proof of residency acceptable to the locality;

4. Death certification to confirm veteran's date of death is on or after January 1, 2011; and

5. A certificate of marriage from the appropriate state office of records.

C. The veteran or surviving spouse may complete the local tax exemption application before receipt of the VA Summary of Benefits letter. The Commissioner of Revenue, or other assessing official, shall ensure that the veteran is aware the application is not complete without the required VA letter. When the application is complete, the assessing official shall inform the veteran or surviving spouse by mail whether or not the application is approved, the veteran or surviving spouse is exempt from the real property tax, and if exempted, the amount of the exemption.

D. The veteran or surviving spouse shall be required to re-file the application and notify the previous jurisdiction, required by this section only, if the principal place of residence changes.

E. While there is no deadline to apply for the exemption, the Commissioner of the Revenue, or assessing official, may only correct and refund (without interest) the past assessments of an initially qualified applicant for no more than the current tax year, plus up to three prior tax years after January 1, 2011.

F. No county, city, or town shall be liable for any interest on any refund due to the veteran or surviving spouse for taxes paid prior to the filing of the application required by § 58.1-3219.6 of the Code of Virginia.

G.  In the determination of the exemption, no locality may implement income or asset limitations or a deadline for application.

H. This chapter does not prohibit the locality's ability to require an annual confirmation of continued residence from the qualifying veteran or surviving spouse.

1VAC80-10-100. Informal requests for information; formal appeals process.

A. The commissioner will provide written guidance to and respond to requests for information from Commissioners of the Revenue, other assessing officials, or veterans regarding the exemption, including interpretation of the provisions of subdivision (a) of Section 6-A of Article X of the Constitution of Virginia and the implementing statutes. Such requests may be by telephone or in writing. Request for an appeal must be in writing.

B. The commissioner does not have the authority to answer questions regarding the assessed value of any property. Such questions should be answered solely by the veteran's respective Commissioner of Revenue or other assessing official.

C. A veteran or surviving spouse desiring to appeal a denial of an application for exemption by a Commissioner of the Revenue or other assessing official shall send a written request for appeal and the document from the veteran's respective Commissioner of Revenue or other assessing official denying the veteran's application as follows:

1. By electronic mail to john.newby@dvs.virginia.gov; carrieann.alford@dvs.virginia.gov with a subject line that states "ATTN: Tax Exemption – APPEAL"; or

2. By U.S. mail or delivery to Commissioner, Virginia Department of Veterans Services, "ATTN: Tax Exemption - APPEAL," 101 N. 14th Street, 17th Floor, Richmond VA 23219.

D. The commissioner may conduct hearings telephonically, by video conferencing means, or if the commissioner determines it necessary, in person at the department's headquarters in Richmond. The appeal shall be limited to issues involving the tax exemption eligibility criteria. The commissioner is not authorized to hear or decide appeals regarding a dispute over a property's assessed value.

E. In advance of any hearing, both the veteran, or surviving spouse, and the Commissioner of the Revenue, or other assessing official, shall be provided (i) reasonable notice of the time, date, and location of the hearing; (ii) the right to appear in person or by counsel, or other qualified representative, before the agency or its subordinates for the presentation of factual data, argument, or proof in connection with any case; and (iii) notice of all facts or information in the possession of the department that could be relied upon in making a decision.

F. The commissioner shall render a decision within 90 days from the date of the hearing, or from a later date agreed to by the veteran, or surviving spouse, and the commissioner. If the commissioner does not render a decision within 90 days, the veteran may provide written notice to the commissioner that a decision is due. If no decision is made within 30 days from the commissioner's receipt of the notice, the decision shall be deemed to be in favor of the veteran.

G. The final decision by the commissioner shall be mailed to all named parties.

H. A decision of the commissioner may be appealed by either party to the circuit court in the locality in which the veteran or surviving spouse resides.

I. The burden shall be upon the party complaining of the commissioner's decision to designate and demonstrate an error of law subject to review by the circuit court. Such issues of law include: (i) accordance with constitutional right, power, privilege, or immunity; (ii) compliance with statutory authority, jurisdiction limitations, or right as provided in the basic laws as to subject matter and the factual showing respecting entitlement in connection with case decisions; (iii) observance of required procedure where any failure therein is not mere harmless error; and (iv) the substantiality of the evidentiary support for findings of fact. Any necessary facts in controversy shall be determined by the court upon the basis of the agency file, minutes, and records of its proceedings, augmented, if need be, by the agency pursuant to order of the court or supplemented by any allowable and necessary proofs adduced in court, except that the function of the court shall be to determine only whether the result reached by the agency could reasonably be said, on all such proofs, to be within the scope of the legal authority of the agency. The court shall take due account of the presumption of official regularity, the experience and specialized competence of the agency, and the purposes of the basic law under which the agency has acted.