- Veterans with a 100% service-connected disability are fully exempt from property taxes on their primary residence — no income limit, no home value cap.
- Starting in the 2026 tax year, veterans with disability ratings from 10%–99% qualify for a proportional property tax exemption (a 70% rating = 70% exemption) — approved by voters in November 2024.
- All honorably discharged veterans qualify for a $10,000 reduction in taxable property value regardless of disability status.
- Military retirement pay is exempt up to $30,000/year through 2026; active duty pay is fully exempt.
- Veterans with a 100% disability rating receive a free lifetime hunting and fishing license with special rules for deer.
- New Mexico offers a lifetime state parks pass for all resident veterans and free monument/museum access for veterans rated 50% or higher.
Table of Contents
- State Tax Benefits
- Property Tax Exemptions
- Education Benefits
- Employment Benefits
- Vehicle Benefits
- Recreation and State Parks
- Veterans Cemeteries
- New Mexico Veterans Resources
- Frequently Asked Questions
New Mexico is home to approximately 150,000 veterans, making up roughly 7.4% of the state’s adult population — one of the highest concentrations in the country. The state’s benefit package has improved substantially in recent years, with a 2024 constitutional amendment expanding property tax relief to all disabled veterans for the first time and a phased retirement pay exemption reaching $30,000. This guide covers current 2026 benefits and the new programs taking effect this year.
USMilitary.org is an independent educational resource, not affiliated with the New Mexico Department of Veterans’ Services (NMDVS), the VA, or any government agency. For official benefit information, visit nmdvs.org.
State Tax Benefits
Active Duty Military Pay
Military pay received by New Mexico resident service members serving on active duty is fully exempt from New Mexico personal income tax. This applies to all branches and all active duty statuses.
Military Retirement Pay
New Mexico exempts up to $30,000 of military retirement pay from state income tax through 2026. This exemption applies to all honorably discharged veterans and disabled retirees. The exemption was phased in: $10,000 in 2022, $20,000 in 2023, and $30,000 from 2024 through 2026. SBP and RCSBP payments are taxable in New Mexico; the only exemptions available are the general retirement exemption or income/age-based provisions available to all residents.
Disability Pay
VA disability compensation and military disability retirement pay are fully exempt from New Mexico state income tax in all cases. DIC (Dependency and Indemnity Compensation) paid to surviving dependents is also tax-free.
Military Spouse Income Tax Exemption
Nonresident military spouses do not pay New Mexico income tax on wages earned while stationed in New Mexico under the Military Spouses Residency Relief Act (MSRRA), provided the service member and spouse share the same state of legal residence.
Property Tax Exemptions
New Mexico has three tiers of property tax relief for veterans, including significant new benefits effective in 2026.
Tier 1: Standard Veterans Exemption (All Honorably Discharged Veterans)
Any honorably discharged veteran (or their unmarried surviving spouse) who is a New Mexico resident may receive a $10,000 reduction in the taxable value of their primary property for county tax purposes. This applies regardless of disability status. Apply through your County Assessor’s Office with your DD-214 and proof of New Mexico residency.
Tier 2: 100% Disabled Veteran — Full Exemption
Resident veterans with a 100% service-connected disability rating from the VA qualify for a complete property tax waiver on their primary residence. Key details:
- No income limit
- No cap on home value
- Temporary 100% ratings qualify (P&T not required)
- Limited to a maximum of 5 acres; additional acreage remains taxable
- Property must be occupied as the veteran’s principal dwelling
To apply: Obtain a Certificate of Eligibility through the New Mexico Department of Veterans’ Services (NMDVS), then submit to your County Assessor’s Office. Timing matters — county assessors operate on yearly valuation cycles and applications generally must be filed before the annual spring cutoff. Contact your county assessor for exact deadlines.
Tier 3: Proportional Exemption for All Disabled Veterans (NEW — 2026 Tax Year)
Following voter approval of Constitutional Amendment 1 in November 2024, New Mexico now offers a proportional property tax exemption for all veterans with service-connected disability ratings from 10% to 100%, effective for the 2026 tax year. A veteran’s exemption is calculated in proportion to their disability rating:
- 70% disability rating = 70% property tax reduction on primary residence
- 80% disability rating = 80% property tax reduction
- 50% disability rating = 50% property tax reduction
This makes New Mexico one of the most veteran-friendly states for property tax relief in the nation. Enabling legislation (HB 47, 2025 session) provides the administrative framework, with implementation for FY27. Contact your County Assessor’s Office in early 2026 for exact application procedures — you will need your VA rating letter and DD-214.
Vehicle Registration Reduction for Veterans Without Sufficient Property
Veterans entitled to the standard property tax exemption who do not have sufficient property to claim it may pay vehicle registration fees at two-thirds the usual rate on vehicles they own. Contact the New Mexico Motor Vehicle Division for eligibility details.
Education Benefits
Vietnam Veterans Scholarship
New Mexico’s Vietnam Veterans Scholarship provides tuition and required books and fees at state schools for eligible Vietnam-era veterans. The scholarship will also pay up to the highest cost of any state school for attendance at private institutions. Contact NMDVS for eligibility requirements and application procedures.
Children of POW/MIA Veterans — College Scholarship
Children of New Mexico veterans who are prisoners of war or missing in action may be eligible for an eight-semester scholarship at a state institution, covering tuition and fees (excluding books, food, supplies, and extracurricular fees). Contact NMDVS for eligibility criteria.
New Mexico National Guard Tuition Scholarship
New Mexico National Guard members may receive tuition scholarship assistance at state institutions. Contact the New Mexico Military Department or NMDVS for current scholarship amounts and eligibility requirements.
In-State Tuition for Veterans
Veterans present in New Mexico pay in-state tuition at state institutions regardless of residency status.
Employment Benefits
State Employment Veterans Preference
Honorably discharged veterans receive 5 preference points added to their passing score on state civil service examinations. Veterans with a service-connected disability receive 10 preference points. In layoff situations, veterans receive additional retention preference over non-veteran employees.
Veteran-Owned Business Preference
New Mexico provides an additional 5% procurement preference for veteran-owned businesses or contractors on top of the existing 5% preference for locally-owned businesses during state contract bidding. This 10% combined preference gives veteran-owned businesses a significant competitive advantage for state contracts.
Business Tax Credit for Hiring Veterans
Any business in New Mexico can qualify for up to a $1,000 business tax credit for each hire of a recently returned veteran. Contact the New Mexico Taxation and Revenue Department at (505) 827-0700 or tax.newmexico.gov for details.
Professional License Expediting
New Mexico has provisions to expedite professional licensing for military members and spouses who relocate to New Mexico due to active duty orders. Contact the relevant licensing board for your profession to apply.
Vehicle Benefits
Disabled Veterans — Vehicle Registration Fee Exemption
Certain disabled veterans are eligible for an exemption from registration fees on one vehicle. Contact the New Mexico Motor Vehicle Division for specific disability rating thresholds and documentation requirements.
Limb Loss — Vehicle Excise Tax Exemption
Any veteran who suffered the complete loss of, or complete loss of use of, one or more limbs due to military service is exempt from the new vehicle excise tax on vehicle purchases.
Veterans License Plates
New Mexico offers specialty veterans license plates recognizing various categories of service including disabled veterans, Purple Heart recipients, former POWs, and more. Contact the Motor Vehicle Division for available plate designs and fee schedules.
Recreation and State Parks
State Parks Lifetime Pass
Resident veterans may receive a lifetime pass for free unlimited day-use and camping at all New Mexico State Parks. Contact the New Mexico State Parks Division for eligibility documentation.
State Monument and Museum Pass
Resident veterans rated 50% or higher service-connected disabled may receive a free State Monument and Museum Pass for personal use at New Mexico state monuments and museums. Contact NMDVS or the New Mexico Department of Cultural Affairs for application procedures.
Hunting and Fishing Licenses
- 100% disabled veterans: Free lifetime game hunting and fishing license with special rules for deer
- Any disabled veterans: $10 combination game hunting and fishing license
- Active duty, reserve, and veteran residents: 50% discount on all licenses, permits, and stamps
Contact the New Mexico Department of Game and Fish for current license procedures and documentation requirements.
Veterans Cemeteries
New Mexico operates three state veterans cemeteries open to honorably discharged veterans and their spouses:
- New Mexico State Veterans Cemetery at Angel Fire — Angel Fire, NM
- Fort Stanton Veterans Cemetery — Fort Stanton, NM
- New Mexico Veterans Memorial Cemetery at Gallup — Gallup, NM
Contact NMDVS for burial eligibility requirements and scheduling at nmdvs.org.
New Mexico Veterans Resources
- New Mexico Department of Veterans’ Services (NMDVS): nmdvs.org
- NMDVS Field Services — Veterans Service Officers: Free assistance with benefits applications statewide
- New Mexico VA Medical Centers: Albuquerque (Raymond G. Murphy VA Medical Center), plus community-based outpatient clinics in Alamogordo, Clovis, Espanola, Farmington, Gallup, Las Cruces, Las Vegas, Santa Fe, and more
- Veterans Crisis Line: Call 988, then press 1
For a full overview of federal VA benefits available to all veterans regardless of state, see our VA Benefits guide and VA Loan overview.
Frequently Asked Questions
Following voter approval of Constitutional Amendment 1 in November 2024, New Mexico now provides a proportional property tax exemption for veterans with any service-connected disability rating from 10% to 100%, effective the 2026 tax year. A veteran with a 70% rating receives a 70% reduction in property taxes on their primary residence; a 50% rating yields a 50% reduction. Previously, only 100% disabled veterans received a full exemption, leaving veterans with lower ratings with only the standard $10,000 taxable value reduction. Contact your County Assessor in early 2026 for application procedures.
No. New Mexico’s full property tax exemption for 100% disabled veterans applies to any VA disability rating of 100%, including temporary 100% ratings. The veteran does not need to have a Permanent and Total (P&T) designation to qualify. The property must be occupied as the veteran’s principal dwelling, and the exemption is limited to 5 acres maximum.
Not fully — New Mexico exempts up to $30,000 of military retirement pay per year through 2026. This covers many retirees completely, but those with higher pensions may still have some New Mexico state tax liability on amounts above $30,000. Active duty military pay is fully exempt from New Mexico income tax.
Yes. New Mexico veterans with qualifying service are fully eligible for federal VA home loan benefits — $0 down payment, no PMI, and competitive rates. New Mexico’s strong property tax exemptions for disabled veterans make VA loans even more attractive in the state, as reduced (or eliminated) property taxes lower the total monthly cost of homeownership. See our VA Loan guide for eligibility and application details.
Start with the New Mexico Department of Veterans’ Services (NMDVS) Field Services Division — trained VSOs provide free assistance statewide. For property tax benefits, you’ll first obtain a Certificate of Eligibility through NMDVS, then file with your County Assessor’s Office. Visit nmdvs.org to find your nearest field office.