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Property Tax Deferral — the Called-Up Track, and Its Better Equity Test
A person called into military service on 1 January can have the state pay their property tax bill and take a junior lien instead. It is a loan, not an exemption: 4.238% simple interest for the year running 1 May 2026 to 30 April 2027. A VA-backed mortgage buys a materially looser equity test than any other applicant gets.
Verified August 23, 2026
What this benefit is
A person called into military service on 1 January can have the state pay their property tax bill and take a junior lien instead. It is a loan, not an exemption: 4.238% simple interest for the year running 1 May 2026 to 30 April 2027. A VA-backed mortgage buys a materially looser equity test than any other applicant gets.
What it's worth: The state pays your property tax bill and takes a junior lien; 4.238% simple interest for 1 May 2026 – 30 April 2027
- The rate is reset every year by statute against the ten-year rate published in a national financial newspaper on 1 February, so the figure above is a one-year figure, not the rate for the life of the loan.
- Interest starts accruing on 1 May of the year the deferral is claimed, not on the day the county would otherwise have been paid.
- The Treasury pays the approved amount straight to the county before 1 May. If that overpays the account, the county refunds the payer and applies the state money.
- Equity test, military track, VA-backed mortgage: liens, mortgages, deeds of trust and deferrals together may not exceed 100% of the actual value the assessor has set.
- Equity test, military track, no VA-backed mortgage: the same total may not exceed 90% of actual value.
- Equity test, senior track, for contrast: liens, mortgages and deeds of trust may not exceed 75% of actual value.
- All previous property taxes must be paid in full, and no reverse mortgage may exist on the property.
- The 2026 cycle closed on 1 April 2026. The Treasury says it will plan the 2027 cycle in the autumn.
This record exists to correct a myth. This is not the disabled veteran exemption and it is not a second exemption. Nothing is forgiven: the state lends you the tax, records a junior lien, and charges interest until the loan is repaid. A veteran can hold the exemption and this deferral at the same time, which is what makes the two easy to confuse.
Who is entitled to it
- The military track runs on being called into military service on 1 January of the year you apply.
- You own the home and it is the homestead the deferral attaches to.
- Your home is in this state.
Not sure whether that describes you?
Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.
How to claim it
Deadline: April 1- 1Apply between 1 January and 1 April. From 2026 the application goes to your COUNTY TREASURER, not to the state — the 2022 shift to the state treasurer was reversed by SB25-261, and filing in the old place is the error to avoid.
- 2Apply online through the state portal if you can; the county will give you the fillable PDF or a paper form on request, and it must be the state-issued form.
- 3Work out your equity position before you file. Add up your mortgage balance, every other lien and any prior-year deferrals plus their interest, then compare that to the actual value on your tax bill. On a VA-backed mortgage the ceiling is 100% of actual value; without one it is 90%.
- 4Clear any earlier property tax owing first — an unpaid prior year is a hard bar, and so is a reverse mortgage on the property.
- 5Being stationed elsewhere does NOT break the residence requirement. The programme names that in terms, alongside absence for ill health.
- 6Re-apply every year you want the deferral to continue, and tell the Treasury if you want to opt out for a year. Skipping the paperwork is not the same as opting out.
- 7Repayment falls due 90 days after a disqualifying event — sale, transfer of title, the property becoming a rental, or a reverse mortgage appearing. On death with no surviving spouse it is one year from the date of death.
- 8Pay the state, never the county. Counties are barred from accepting payment on these liens and cannot release them; payments and payoff statements go to the Department of the Treasury.
- Form
- Property tax deferral application (the official state form; counties may not substitute their own)
- File with
- Your county treasurer, between 1 January and 1 April
- Documents you will need
- dd214
- Re-file every year
- Entitlement is retested annually. Missing a year costs that year.
CorrectionThis is not the disabled veteran exemption and it is not a second exemption. Nothing is forgiven: the state lends you the tax, records a junior lien, and charges interest until the loan is repaid. A veteran can hold the exemption and this deferral at the same time, which is what makes the two easy to confuse.
CorrectionThe tax-growth track is gone. Until SB25-261 a homeowner who was neither a senior nor called up could defer once their tax rose past a set percentage; no new application on that basis has been possible since the 2026 cycle. Existing tax-growth loans stay in place on their original terms.
CorrectionFile with the county treasurer, not the state. SB25-261 handed dissemination, acceptance, review and recording of applications back to counties for 2026. Guidance written between 2022 and 2025 sends applicants to the state treasurer and is now wrong on the most basic step.
Worth knowingThe military track has two advantages over the senior track that are easy to miss. Its equity ceiling is 90% of actual value rather than 75%, and it rises to 100% where the mortgage is VA-backed — so a service member with very little equity can still get in where a senior with the same balance sheet could not.
Worth knowingBeing posted away from the home does not disqualify you. The programme lists absence because the owner is stationed elsewhere as an express exception to the residence requirement, and repeats it in the list of events that would otherwise end a deferral.
Known gapThe interest rate here is the figure the Treasury published for the year beginning 1 May 2026. The statutory formula was read only as the agency describes it — the codified rate provision was not read, because the host carrying the statute text refused both fetching and the browser this session.
Known gapWhether the deferral may be claimed for half the bill as well as the whole of it is stated on the state portal but not on the Treasury pages read here, and no maximum lifetime deferral amount appeared on any page read. Treat the cap as unresearched.
Sources
- authority · published policyDepartment of the Treasury — Property Tax Deferral Program Overview (active military eligibility, equity tests, repayment events)
- operating · published policyDepartment of the Treasury — Property Tax Deferral Program FAQ (interest rate 4.238% for 1 May 2026 – 30 April 2027; application window; county filing)
- operating · published policyGeneral Assembly — SB25-261 Property Tax Deferral Program Administration, as enacted (reverses the 2022 shift to the state treasurer; rescinds the tax-growth track)
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