Total Income Tax Exemption on Military Pensions
100% of military retirement pension excluded from Puerto Rico income taxPuerto Rico residents who are veterans or retired members of the US Armed Forces owe no Puerto Rico income tax whatsoever on their military retirement pension. This is a full 100 percent exemption on that income stream, not a capped deduction. It is claimed on Schedule H of the individual return.
Agency: Departamento de Hacienda de Puerto Rico
Note: NEW FOR TAX YEAR 2025. Hacienda lists it under 2025 NUEVOS BENEFICIOS CONTRIBUTIVOS, so returns for earlier years do not carry it. Statutory basis is Section 1033.18(a)(3) of the Puerto Rico Internal Revenue Code. The filer must attach BOTH Form 1099-R and Form DD-214; e-filers submit them through SURI no later than the fourth business day after the filing deadline. Distinct from VA disability compensation, which is already untaxed federally.
Veterans' Property Tax Exemption - Standard
Exempts $5,000 of assessed value from municipal property tax, permanentlyAny honorably discharged veteran, or their surviving spouse, gets a permanent exemption on the first $5,000 of the assessed value of the home they built or bought in good faith as their principal residence. It stacks on top of the general residential homestead exoneration available to all Puerto Rico homeowners, and once approved it can be applied retroactively for up to three years.
Agency: Centro de Recaudacion de Ingresos Municipales (CRIM)
Note: CORRECTION TO A WIDELY REPUBLISHED FIGURE: many aggregator sites state this exemption is $50,000. Read against the statute, Ley 203-2007 Art. 4(C) Segundo (a)(1) grants $50,000 only for the enumerated fiscal years 2009-10 through 2018-19, all of which have elapsed. The permanent standing amount is $5,000. Apply on CRIM Form AS-38, which has a dedicated Exencion Veteranos: Regular checkbox. Only the dwelling actually occupied by the veteran counts if the building holds multiple units.
Property Tax Exemption for Veterans with 50% or Greater Service-Connected Disability
$50,000 of assessed value exempt, stacking on the $5,000 standard exemptionA veteran receiving VA compensation for a service-connected disability rated 50 percent or higher is exempt from property tax on the first $50,000 of the assessed value of their principal residence. This is granted in addition to the standard $5,000 veterans' exemption. Coverage extends to the land the house sits on, up to 1,000 square meters in an urban zone or one cuerda in a rural zone.
Agency: Centro de Recaudacion de Ingresos Municipales (CRIM)
Note: The rating that counts is the one VA recognizes as of January 1 of the tax year, proven by written VA certification. Normally claimed annually at the CRIM regional office, BUT if VA has established the disability as permanent the veteran files once and never re-certifies. The exemption stops if the rating drops below 50 percent or the home stops being the residence, and is recoverable if either is restored. The $500,000 figure some sources cite applied only to fiscal years 2009-10 through 2018-19 and has expired.
Full Property Tax Exemption for Disabled or Impaired Veterans
Complete elimination of property tax on the qualifying home and lotA disabled or impaired veteran pays no property tax at all on a home they built, purchased, or remodeled, along with the lot it occupies up to 1,000 square meters in an urban zone or one cuerda in a rural zone. The property must serve as the residence of the veteran or their immediate family. If the veteran later moves, the right revives once they rebuild or establish a home on another property.
Agency: Centro de Recaudacion de Ingresos Municipales (CRIM)
Note: CAUTION ON ELIGIBILITY. The statute grants this to a veterano incapacitado o impedido and cross-references a federal statute that is garbled in the official text, and it never states a numeric VA rating. Do NOT assume it means 100 percent. CRIM treats it as its own application category (Con Impedimento on Form AS-38), distinct from the 50-percent tier, and CRIM determines who qualifies. Confirm the qualifying standard with a CRIM regional office before relying on this.
Additional Personal Income Tax Exemption for Veterans
$1,500 additional exemption per veteran; $3,000 when both spouses are veteransEvery veteran of the US Armed Forces filing a Puerto Rico income tax return may claim an extra $1,500 personal exemption on top of the ordinary personal and dependent exemptions. A married couple filing jointly where both spouses are veterans claims $3,000. It reduces taxable income, applies for life, and requires no disability rating.
Agency: Departamento de Hacienda de Puerto Rico
Note: Claimed on Line 9 of Encasillado 2 of the individual return; couples electing the optional separate computation claim $1,500 each on Line 7 of Schedule CO. Hacienda does not require the DD-214 to be attached, but keep a copy for six years in case of audit. Ley 203-2007 Art. 4(C) Primero describes the same lifetime benefit effective from tax year 2007, so statute and current filing instructions agree.