Can a married couple in Arkansas who live in separate houses both claim the homestead property tax credit?

Plain-English summary

A Madison County couple jointly owned two homes and lived separately in each. They asked whether each spouse could claim the $375 Arkansas homestead property tax credit on a different residence, or whether one could claim the credit while the other claimed the 100% disabled veterans' exemption on the second home. Attorney General Leslie Rutledge answered no to all three combinations.

The reason: Amendment 79 and Ark. Code Ann. § 26-26-1118 set up a single homestead credit per "property owner," and § 26-26-1119(a)(1) explicitly bars any property owner from claiming more than one credit per year. When spouses are joint record owners of both houses, each is a property owner of each property, so once one home receives the credit, neither spouse can claim it on the other. The disabled veterans' exemption under § 26-3-306 has its own non-stacking rule: under § 26-3-306(e), a person claiming that exemption cannot also claim the homestead credit under § 26-26-1118 anywhere.

Currency note

This opinion was issued in 2021. The cited statutes and Amendment 79 cap structure may have been amended since. Treat this page as historical context. Verify the current credit amount, the current text of § 26-26-1118 and § 26-3-306(e), and any newer AG opinions before relying on the analysis for a specific tax year.

What this means for you

If you own two Arkansas homes with your spouse

Based on this opinion, joint ownership is the trap. As long as both spouses are on the deed for both houses, the household gets one homestead credit, full stop. The credit cannot be split across two principal residences just because the spouses live apart. If you genuinely have separate property, separately deeded, the analysis would be different (the AG explicitly declined to address that scenario in footnote 7), and a tax attorney can walk through the title work.

If one spouse is a 100% disabled veteran

Under § 26-3-306(e) as cited in this opinion, claiming the disabled veterans' tax exemption on one home blocks the other spouse from claiming the $375 homestead credit on the second jointly-owned home. The exemption is bigger than the credit, so the math usually still favors the exemption, but you cannot collect both per household.

If you are a county assessor or collector

When a married couple files for the homestead credit on two separate residences, check the deed. If both spouses appear as record owners on both properties, only one credit is permitted under § 26-26-1119(a)(1) and § 26-26-1118(b)(4)(C). The same screen applies if one spouse files for the disabled veterans' exemption and the other files for the homestead credit on a different jointly-owned property: § 26-3-306(e) makes that combination unavailable.

Common questions

Q: Why can't a married couple living in two houses each get a homestead credit?
A: Because each spouse is a "property owner" (record owner) of both jointly-owned homes, and § 26-26-1119(a)(1) prohibits any property owner from claiming more than one credit per year. The "one credit per owner" rule, applied to spouses who are joint owners of multiple properties, collapses to one credit per couple.

Q: What if only one spouse is on the deed for each house?
A: That situation was not addressed in this opinion. The AG flagged the question in a footnote and left it open. Get a property tax attorney to review the title and the timing of acquisition before assuming each spouse can claim a separate credit.

Q: Is the disabled veterans' exemption the same as the homestead credit?
A: No. The exemption under § 26-3-306 wipes out property tax liability on the qualifying veteran's homestead. The credit under § 26-26-1118 reduces the tax bill by $375 (as of this opinion). They are separate programs with separate eligibility rules, but § 26-3-306(e) prohibits double-dipping by anyone claiming the exemption.

Q: Can a disabled veteran's spouse claim the homestead credit on a different jointly-owned home?
A: Per this opinion, no. Section 26-3-306(e) bars the exemption holder from claiming the credit, and where the spouse is also a record owner of the second home, claiming a credit there would, in substance, route the credit to a person already disqualified.

Background and statutory framework

Amendment 79 to the Arkansas Constitution, ratified in 2000, directed the General Assembly to create an annual property tax credit on each homestead. The implementing legislation in § 26-26-1118 sets the credit (at the time of this opinion, $375) and § 26-26-1119(a)(1) caps the claim at one per property owner per year. Section 26-26-1118(b)(4)(C) says the same thing in stronger terms: under no circumstances may a property owner claim more than one homestead credit per calendar year.

The disabled veterans' exemption under § 26-3-306 is a separate, larger benefit for veterans rated 100% disabled by the VA. Subsection (e) prevents stacking by saying a person claiming the exemption "shall not be entitled to claim the property tax credit authorized in § 26-26-1118."

Citations and references

Statutes and Constitutional provisions:

• Ark. Const. amend. 79, § 3 (homestead tax credit authority)
• Ark. Code Ann. § 26-26-1118 (annual $375 homestead credit)
• Ark. Code Ann. § 26-26-1119(a)(1) (one credit per property owner per year)
• Ark. Code Ann. § 26-26-1122 (definitions of "homestead" and "property owner")
• Ark. Code Ann. § 26-3-306(a), (e) (100% disabled veterans' exemption and anti-stacking rule)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2021-053
December 20, 2021

The Honorable Mark H. Berry
State Representative
P.O. Box 1205
Ozark, AR 72949-1205

Dear Representative Berry:

This is in response to your request for an opinion on the following questions relating to homestead property tax credits:

1. May a married couple living separately each claim a homestead property tax credit for their separate residences?
2. May a married couple living separately claim a homestead property tax credit on one residence and a 100% disabled veterans' exemption status on the other residence?
3. Is 100% disabled veteran status considered a homestead property tax credit as mentioned and described in Arkansas Code § 26-26-1119?

You have provided the following background for these questions:

Amendment 79 to the Arkansas Constitution and Arkansas Code § 26-26-1118 established a homestead property tax credit for the homestead of each property owner in the state of Arkansas. Further, Arkansas Code § 26-26-1119 provides that no property owner shall claim more than one homestead property tax credit for each year.

My constituents in Madison County are a married couple that jointly owns two homes and live separately in those two homes. Each spouse claims his/her home as his/her primary residence. One spouse seeks to claim a homestead property tax credit in his/her residence while the other spouse seeks to claim and receive a 100% disabled veterans' exemption status at the other residence.

RESPONSE

The answer to each of these questions is "no" under the factual background provided in your correspondence. But with regard to Question 3, the applicable restriction is Ark. Code Ann. § 26-3-306(e).

DISCUSSION

Question 1: May a married couple living separately each claim a homestead property tax credit for their separate residences?

No. Where the couple jointly owns both homes, they may only claim one tax credit.

Amendment 79 to the Arkansas Constitution requires the General Assembly to "provide by law for an annual state credit against ad valorem property tax on a homestead . . . ." The implementing legislation currently provides for an annual homestead property tax credit of $375:

There is established a homestead property tax credit for each assessment year that reduces the amount of real property taxes assessed on the homestead of each property owner by three hundred seventy-five dollars ($375).

The implementing legislation also provides that "[n]o property owner shall claim more than one (1) homestead property tax credit for each year."

"Homestead" is defined in pertinent part as "the dwelling of a person that is used as his or her principal place of residence . . . ." The implementing legislation further defines "property owner" in relevant part as "a person who is . . . [t]he owner of record of real property . . . ."

Thus, a property owner, i.e., the record owner (for the purposes of your inquiry) may claim the homestead tax credit only with respect to a principal place of residence. And no record owner may claim more than one homestead credit. In the case of a married couple that jointly owns two residences, each spouse presumably is a record owner of each residence. Consequently, once a homestead tax credit is claimed for one of the residences, each spouse will be precluded by operation of subdivisions 26-26-1119(a)(1) and 26-26-1118(b)(4)(C) from claiming the credit for any other property they jointly own.

Question 2: May a married couple living separately claim a homestead property tax credit on one residence and a 100% disabled veterans exemption status on the other residence?

No. Where the married couple jointly owns each residence and each spouse is a record owner of each residence, the couple may not claim both. The disabled veteran's homestead tax exemption statute, Ark. Code Ann. § 26-3-306, provides that "[a] person claiming the property tax exemption authorized by this section shall not be entitled to claim the property tax credit authorized in § 26-26-1118." As noted above, section 26-26-1118 provides for the general, annual $375 homestead tax credit authorized by Amendment 79.

The homestead property tax credit is, therefore, unavailable to a disabled veteran claiming the disabled veteran's exemption. Under the facts you have presented, the disabled veteran would necessarily be claiming the homestead credit on the other, jointly owned residence, contrary to subsection 26-3-306(e).

Question 3: Is 100% disabled veteran status considered a homestead property tax credit as mentioned and described in Arkansas Code § 26-26-1119?

No. But the applicable restriction under the factual background for your questions is Ark. Code Ann. § 26-3-306(e). As explained in response to Question 2 above, that statute makes the homestead property tax credit under section 26-26-1118 unavailable to a disabled veteran claiming the exemption under subdivision 26-3-306(a)(1)(A).

Sincerely,

LESLIE RUTLEDGE
Attorney General