Idaho Veteran Benefits 2025: Property Tax Reduction, Income Tax Exemption & Affordable Living

Idaho offers veterans complete state income tax exemption on military retirement pay (as of 2025, with no age restrictions) and up to $1,500 annual property tax reduction for 100% disabled veterans. Unlike high-cost states like California and Hawaii, Idaho delivers these benefits with a cost of living only 2-5.5% above the national average - meaning your tax savings actually matter.

Idaho is also one of America's fastest-growing states, with Boise and surrounding areas experiencing explosive growth. Housing costs have risen dramatically (median home in Boise now $500K-$547K), but remain far below coastal states. The state's conservative, military-friendly culture and proximity to Mountain Home Air Force Base create a strong veteran community.

This guide breaks down exactly what Idaho offers veterans and what it costs to live here in 2025.

Bottom Line Up Front

Here's what Idaho offers veterans:

State income tax on military retirement: 0% - completely exempt (NEW: no age requirement as of 2025)
Property tax reduction for 100% disabled veterans: Up to $1,500 annually on primary residence
Property tax reduction for <100% disabled: None - must be rated 100% service-connected
Sales tax: 6% state rate (some cities add local sales tax)
Idaho state income tax rates: 5.8% flat rate (but military retirement exempt)
Vehicle registration: Standard rates, no special veteran discount

Potential annual savings for 100% disabled veteran: Up to $1,500 in property taxes, plus state income tax savings on military retirement (approximately $2,000-$3,000 for average retiree)

Reality check: Idaho's cost of living is 2-5.5% above the national average, but Boise-area housing has skyrocketed (median home $500K-$547K, up from $300K in 2019). Smaller cities like Pocatello, Idaho Falls, and Twin Falls remain affordable ($320K-$370K median homes). Idaho is no longer the "cheap" state it was five years ago, but it's still far more affordable than California, Washington, or Colorado.

Income Tax Treatment for Veterans

Military Retirement Pay - 100% Exempt (2025 Expansion)

Idaho completely exempts military retirement pay from state income tax. As of 2025, the state eliminated previous age and disability requirements, making Idaho one of the most veteran-friendly states for military retirees.

What changed in 2025:

Before 2025: Military retirees had to be age 65+, or age 62+ with disabilities, to claim the exemption
After 2025: Military retirement pay is exempt regardless of age or disability status
Law signed by Governor Brad Little on March 6, 2025, with April amendment

What this means:

Military retirement pay: 100% exempt from state tax (any age)
VA disability compensation: Tax-free (federally and state)
Civilian employment income: Taxable at Idaho rates (5.8% flat)
Investment income: Taxable at Idaho rates
Social Security: Partially taxable (depends on income level)

Example: An E-8 retiree age 40 with 20 years receiving $35,000 annual military retirement pays $0 Idaho state income tax on that retirement income.

Comparison to nearby states:

Washington: No state income tax (but high sales tax and property taxes)
Oregon: Taxes military retirement (9% top rate, though deduction available)
Montana: Taxes military retirement (6.75% top rate)
Utah: Partial exemption for military retirement

Idaho's complete exemption is a significant advantage over neighboring states like Oregon and Montana.

Idaho State Income Tax Rates (2025)

Idaho implemented a flat 5.8% income tax rate in 2024, replacing the previous graduated bracket system. This simplification makes tax planning easier - but the rate doesn't apply to military retirement.

What the 5.8% flat rate means:

All taxable income taxed at 5.8% (after deductions)
Standard deduction: $14,600 (single), $29,200 (married filing jointly)
No graduated brackets anymore

For veterans:

Military retirement income: Exempt (not subject to 5.8% rate)
Civilian job income: Taxable at 5.8%
Post-retirement employment: Taxable at 5.8%

Example: Veteran earning $60,000 from civilian job

Taxable income after standard deduction: ~$45,400
Idaho state tax: ~$2,633 annually
But $0 tax on military retirement regardless of amount

Why this matters: If you work a civilian job in Idaho earning $50,000, you'll pay approximately $2,030 in state income tax. But your $30,000 military retirement is completely exempt, saving you $1,740 annually compared to states that tax military retirement.

Other Retirement Income

Public and private pension income: Also exempt from Idaho state income tax

401(k) and IRA withdrawals: Fully taxable at 5.8% rate

Social Security benefits: Idaho does not tax Social Security benefits (big advantage over states like Colorado, Montana, Utah)

Investment income: Fully taxable at 5.8%

The strategy: If you're living in Idaho on retirement income, maximize military pension and Social Security (both exempt), minimize 401(k)/IRA withdrawals (taxable at 5.8%).

Federal Income Tax Still Applies

Idaho's state tax exemption doesn't change federal obligations. You still owe federal income tax on military retirement pay unless it qualifies for Combat-Related Special Compensation (CRSC) or other federal exemptions.

Property Tax Reduction for Veterans

100% Disabled Veterans - Up to $1,500 Reduction

Veterans rated 100% disabled by the VA qualify for up to $1,500 annual property tax reduction on their primary residence and up to one acre of land.

How it works:

Reduction applies to your primary residence only
Maximum reduction: $1,500 per year
Must be rated 100% service-connected disabled (P&T or Individual Unemployability qualifies)
Must own and occupy the home as primary residence
Property must have homeowner's exemption
No income limits (unlike some states)

Important: This is a reduction, not an exemption. You still pay property taxes, but get up to $1,500 knocked off your annual bill.

Real-World Examples by County

Ada County (Boise area)

Home market value: $500,000 (median in Boise 2025)
Assessed value: $500,000
Exemption (50% owner-occupied, up to $125K): $125,000
Net taxable value: $375,000
Property tax rate: ~0.59% ($5.90 per $1,000)
Without veteran reduction: $2,213 annually
With 100% disabled veteran reduction: $713 annually
Annual savings: $1,500

Home value: $350,000 (Idaho Falls typical)

Net taxable value after homeowner exemption: $225,000
Without veteran reduction: $1,845 annually (at 0.82% rate)
With 100% disabled veteran reduction: $345 annually
Annual savings: $1,500

Home value: $250,000 (smaller city)

Net taxable value: $125,000
Without veteran reduction: $863 annually (at 0.69% avg rate)
With 100% disabled veteran reduction: $0 (reduction exceeds tax bill)
Annual savings: $863

Key insight: The $1,500 reduction is most valuable on higher-value properties (Boise, Coeur d'Alene) where property taxes are $1,500+. On lower-value properties in smaller cities, the reduction may exceed your entire property tax bill, effectively making it tax-free.

Disability Ratings Below 100% - No Reduction

Idaho's property tax reduction for veterans is binary:

100% disabled: Up to $1,500 reduction
90% or lower: No property tax reduction whatsoever

If you're rated 90%, 70%, 50%, or any percentage below 100%, you receive no property tax benefit from your VA disability rating in Idaho. You pay full property taxes like any other homeowner (though you still get the standard 50% homeowner exemption that all Idaho residents receive).

Why this matters: If you're rated 90% and hoping to save on property taxes, you won't. Idaho doesn't offer graduated exemptions like some states. Your only benefit is the military retirement income tax exemption.

Annual Application Required

Unlike some states with "one-and-done" exemptions, Idaho requires veterans to reapply each year for the property tax reduction.

Application deadline: April 15 annually

Where to apply: Your county assessor's office

Documents needed:

Current VA rating letter showing 100% service-connected disability (dated January 1 of tax year)
Idaho driver's license or state ID
Property deed or mortgage documents showing ownership
DD-214 (Certificate of Release or Discharge from Active Duty)
Completed application form (varies by county)

Online application: Idaho State Tax Commission offers online applications at tax.idaho.gov/proptaxrelief

Exception for permanent disabilities: Veterans with documented permanent and total disabilities don't need to reapply each year. Their benefit renews automatically. However, you must still notify the county if you move or sell the property.

Processing time: 30-60 days typically, applied to your December tax bill

Surviving Spouses

A surviving spouse of a 100% disabled veteran may continue to claim the property tax reduction if:

The veteran was receiving the reduction at time of death
Spouse remains unmarried
Spouse continues to own and occupy the home as primary residence
Spouse applies annually (or has permanent status)

This benefit can save surviving spouses up to $1,500 annually and help them afford to remain in their homes.

Idaho's Homeowner Exemption (All Residents)

Idaho offers a generous 50% homeowner exemption to all owner-occupants, up to $125,000 of assessed value.

How it works:

First $125,000 of home value: 50% exempt (so $62,500 exempt)
Reduces property tax for all homeowners
Separate from veteran property tax reduction (you get both if 100% disabled)

Example: Non-disabled veteran with $400,000 home in Boise

Assessed value: $400,000
Homeowner exemption (50% of first $125K): $62,500
Taxable value: $337,500
Property tax rate: 0.59% (Ada County)
Annual property tax: $1,991

With 100% disabled veteran reduction: $491 annually (save $1,500)

Property Tax Rates by County (2025)

Idaho's property tax rates vary significantly by county. Here are the rates for counties with significant veteran populations:

County	Effective Rate	Rate per $1,000	Median Home Price	Avg Annual Tax
Ada (Boise)	0.59%	$5.90	$500,000	~$2,200
Kootenai (Coeur d'Alene)	0.52%	$5.20	$575,000	~$2,340
Canyon (Nampa)	0.85%	$8.50	$420,000	~$2,635
Bonneville (Idaho Falls)	0.82%	$8.20	$350,000	~$2,238
Bannock (Pocatello)	0.69%	$6.90	$325,000	~$1,749
Twin Falls	0.69%	$6.90	$365,000	~$1,963

Key insights:

Ada County (Boise) has moderate rates but high home values
Canyon County (Nampa) has highest rate in major metro
Smaller cities have lower home values offsetting higher rates
100% disabled veterans save $1,500 annually regardless of county

Statewide average: 0.69% (or $6.90 per $1,000), which is 33rd-lowest in the nation

Compare to neighboring states:

Oregon: 0.87% average (higher)
Washington: 0.84% average (higher)
Montana: 0.74% average (slightly higher)
Utah: 0.57% average (lower)

Idaho's property taxes are reasonable compared to regional neighbors, though rising home values have increased total tax bills.

Sales Tax - 6% State Rate

Idaho has a 6% state sales tax on most goods and services. This is middle-of-the-road nationally.

Local sales taxes: Some cities add up to 3% local sales tax

Boise: 6% (no local add-on)
Idaho Falls: 6%
Most cities: 6-7% total

What's taxed:

Retail goods (clothing, electronics, household items)
Restaurant meals
Hotel stays
Vehicle purchases (but may qualify for tax credit)

What's not taxed:

Groceries: Tax-free (big advantage - most states tax groceries)
Prescription drugs: Tax-free
Medical services: Tax-free

For veterans: No special sales tax exemptions. Veterans pay the same rate as all residents.

Practical impact: You'll pay 6-7% sales tax on most purchases, but groceries are exempt (saving ~$300-600 annually for families compared to states that tax food).

Comparison to neighbors:

Washington: 6.5% state + local (up to 10.4% total in Seattle)
Montana: 0% sales tax (advantage Montana)
Oregon: 0% sales tax (advantage Oregon)
Utah: 6.1% state + local

Idaho's sales tax is moderate but higher than Montana and Oregon (which have no sales tax).

Vehicle Registration and Licensing

Idaho does not offer special vehicle registration discounts or fee waivers for veterans.

Standard fees:

Registration: Based on age, weight, and value of vehicle
Typical cost: $50-$150 annually for passenger vehicles
License plates: ~$25 every 7 years

Disabled veteran plates: Available for free to 100% disabled veterans

Purple Heart plates: Available
POW plates: Available
No registration fee reduction, just commemorative plates

How to get veteran plates: Idaho Division of Motor Vehicles (DMV) with DD-214 and VA documentation

Comparison to other states: Many states offer vehicle registration discounts or exemptions for disabled veterans. Idaho does not, which is a missed opportunity.

Cost of Living Reality Check

Idaho's tax benefits for veterans are solid - complete military retirement exemption and up to $1,500 property tax reduction. But the state's explosive growth, particularly in the Boise metro area, has dramatically increased living costs.

Idaho Cost of Living Index: 102-105.5

What this means: Living in Idaho costs 2-5.5% more than the U.S. average (depending on source and location).

Comparison: If your expenses in an average-cost state are $3,000/month, expect to pay $3,060-$3,165/month in Idaho.

This is far lower than high-cost states:

California: 138 (38% above average)
Washington: 113 (13% above average)
Colorado: 105 (5% above average)
Oregon: 115 (15% above average)

Idaho remains more affordable than its West Coast neighbors, but the gap is narrowing.

Housing Costs (2025) - The Big Story

Idaho's housing market has experienced explosive growth, particularly in the Boise metro area. What was once an affordable housing market is now expensive by regional standards.

Boise/Ada County:

Median single-family home: $500,000 - $547,000 (up 11.7% in 2025)
Median condo: ~$350,000 - $400,000
Rent (1BR apartment): $1,200 - $1,600/month
Rent (2BR apartment): $1,400 - $1,900/month
Rent (3BR house): $1,800 - $2,600/month

Historical context: Boise's median home was ~$300,000 in 2019. It's increased 67-80% in just 5-6 years.

Nampa/Canyon County (Boise suburbs):

Median home: $406,000 - $490,000
More affordable than Boise but still expensive
Rent (2BR): $1,200 - $1,700/month

Coeur d'Alene/Kootenai County (North Idaho):

Median home: $575,000 (more expensive than Boise)
Popular resort town, influx from California/Washington
Rent (2BR): $1,400 - $2,000/month

Idaho Falls/Bonneville County:

Median home: $350,000 (more affordable)
Stable market, less growth pressure
Rent (2BR): $1,000 - $1,400/month

Pocatello/Bannock County:

Median home: $318,000 - $335,000 (most affordable major city)
University town (Idaho State)
Rent (2BR): $900 - $1,300/month

Twin Falls County:

Median home: $365,000 - $450,000 (mid-range)
Agricultural/regional center
Rent (2BR): $1,000 - $1,400/month

Reality check: Even with $1,500 property tax reduction, you still need to afford the mortgage or rent. Boise-area housing is no longer "cheap" - a $500K home requires $100K+ household income to afford comfortably. Smaller cities remain accessible for typical military retirees.

Groceries: Tax-Free (Big Advantage)

Idaho does not tax groceries, which is a significant advantage over many states.

Real costs (Boise, 2025):

Gallon of milk: $3.50 - $4.50
Dozen eggs: $3.00 - $4.50
Loaf of bread: $2.50 - $4.00
Pound of ground beef: $5.00 - $7.00
Gallon of gas: $3.20 - $3.80
Pound of chicken breast: $4.00 - $6.00

Monthly grocery bill:

Single person: $350 - $500
Family of four: $800 - $1,200

These costs are roughly at national average or slightly higher.

Why food costs are reasonable: Idaho produces agriculture locally (potatoes, beef, dairy), reducing shipping costs. Being tax-free adds 6-10% savings compared to states that tax groceries.

Utilities: Reasonable

Idaho's utility costs are moderate compared to the national average.

Electricity:

Average rate: $0.10 - $0.11 per kWh (2025)
National average: $0.17 per kWh
Idaho is 35-40% cheaper than national average

Monthly electricity bill:

Small apartment (600 sq ft): $60 - $90
House (1,500 sq ft): $100 - $150
House with AC (summer): $150 - $200

Why electricity is affordable: Idaho generates 50% of electricity from hydroelectric (cheap), plus natural gas and wind.

Natural gas: $50 - $120/month (winter heating)

Water/Sewer: Varies by city

Boise: $60 - $100/month typical
Smaller cities: $40 - $80/month

Internet/Phone: Similar to national average ($60 - $120/month for internet)

Total utilities: $200 - $350/month typical for house

Transportation

Gas: $3.20 - $3.80/gallon (2025)

Middle of the road nationally
Lower than California ($4.50+) and Washington ($4.00+)

Car insurance: Slightly below national average

Full coverage: $1,200 - $1,800/year typical
Idaho has lower insurance costs than coastal states

Vehicle costs: Idaho requires personal vehicle ownership (limited public transit outside Boise). Budget $200-$400/month for gas, insurance, maintenance.

Healthcare

Healthcare costs: 5-10% below national average (advantage Idaho)

Doctor visits: $100 - $175
Specialist visits: $150 - $250
Emergency room: $1,000 - $3,000

VA healthcare: Available at no cost for eligible veterans (see companion guide on Idaho VA facilities)

Health insurance: Premiums slightly below national average

Financial Impact Analysis: Can You Afford Idaho?

Let's calculate real financial scenarios for veterans considering Idaho.

Scenario 1: E-7 Retiree, 20 Years Service, 100% P&T Disabled (Boise)

Annual income:

Military retirement: $30,000 (state tax exempt)
VA disability (100% P&T): $44,844 (tax-free)
Total: $74,844

Idaho 20-Year Financial Impact

Benefit	Annual Savings	20-Year Total
No state income tax on $30K retirement	$1,740 (vs 5.8% rate)	$34,800
Property tax reduction ($500K Boise home)	$1,500	$30,000
TOTAL SAVINGS	$3,240	$64,800

The Cost Reality

Annual costs (Boise - family lifestyle):

Housing (mortgage on $500K home, 20% down): $2,800/month = $33,600/year
Property tax (after $1,500 reduction): $700/year
Groceries: $900/month = $10,800/year
Utilities: $250/month = $3,000/year
Transportation: $350/month = $4,200/year
Healthcare (with VA): $1,000/year
Total annual expenses: $53,300

Income vs. Expenses:

Total income: $74,844
Total expenses: $53,300
Surplus: $21,544/year

Feasibility: Yes, this works - especially with 100% property tax reduction and no state tax on retirement. Boise is affordable for this income level.

Scenario 2: E-8 Retiree, 20 Years, 50% Disabled, Working Spouse (Idaho Falls)

Annual income:

Military retirement: $35,000 (state tax exempt)
VA disability (50%): $10,856 (tax-free)
Veteran's job: $50,000 (state taxable)
Spouse's job: $45,000 (state taxable)
Total: $140,856

Tax impact:

Idaho state tax on $95K combined civilian income: ~$4,814
Savings from military retirement exemption: ~$2,030
Property tax ($350K Idaho Falls home): $1,845 (no veteran reduction at 50%)

Annual costs (Idaho Falls - family lifestyle):

Housing (mortgage on $350K home): $2,200/month = $26,400/year
Property tax: $1,845/year
Groceries: $900/month = $10,800/year
Utilities: $200/month = $2,400/year
Transportation: $300/month = $3,600/year
Healthcare: $1,500/year
State income tax: $4,814/year
Total annual expenses: $51,359

Income vs. Expenses:

Total income: $140,856
Total expenses: $51,359
Surplus: $89,497/year (substantial)

Feasibility: Excellent - dual income with military retirement provides very comfortable lifestyle in smaller Idaho cities.

Scenario 3: O-5 Retiree, 20 Years, 70% Disabled, Single (Coeur d'Alene)

Annual income:

Military retirement: $55,000 (state tax exempt)
VA disability (70%): $17,708 (tax-free)
Part-time work: $30,000 (state taxable)
Total: $102,708

Tax impact:

Idaho state tax on $30K civilian income: ~$893
Savings from military retirement exemption: ~$3,190
Property tax ($575K Coeur d'Alene home): $2,340 (no reduction at 70%)

Annual costs (Coeur d'Alene - single):

Housing (mortgage on $575K home, 20% down): $3,200/month = $38,400/year
Property tax: $2,340/year
Groceries: $400/month = $4,800/year
Utilities: $200/month = $2,400/year
Transportation: $250/month = $3,000/year
Healthcare: $1,000/year
State income tax: $893/year
Total annual expenses: $52,833

Income vs. Expenses:

Total income: $102,708
Total expenses: $52,833
Surplus: $49,875/year

Feasibility: Yes, comfortable - even in expensive Coeur d'Alene with 70% disability (no property tax reduction).

Who Can Afford Idaho Financially?

You can likely afford Idaho if:

Combined household income $70K+ (Boise), $60K+ (smaller cities)
You're 100% disabled (property tax reduction helps)
You have dual income household
You're willing to live outside Boise metro (Idaho Falls, Pocatello, Twin Falls)
You work federal/state job or Mountain Home AFB

You might struggle in Idaho if:

You're single income retiring E-6 or below (under $30K retirement)
You're targeting expensive areas (Boise, Coeur d'Alene) without substantial income
You have no disability rating (miss property tax reduction)
You expect to live on military retirement alone in Boise

The Realistic Math

Income needed to live comfortably in Idaho:

Boise (family of 4): $75,000 - $100,000
Smaller cities (family of 4): $60,000 - $80,000
Single person anywhere: $45,000 - $65,000

Median household income in Idaho: $69,000

Above the "small city comfortable" threshold
Below "Boise comfortable" threshold

Most military retirees earn: $30,000 - $50,000 military retirement + VA disability

Boise requires additional employment
Smaller cities are accessible on retirement alone if 100% disabled

Conclusion: Idaho is affordable for military retirees willing to live in smaller cities (Idaho Falls, Pocatello, Twin Falls) or work part-time in Boise. Boise's housing boom has priced out retirees living solely on military retirement, but smaller cities remain very accessible.

How to Claim Your Benefits

Property Tax Reduction (100% Disabled Veterans)

Timeline: Apply by April 15 annually with your county assessor

Required documents:

Current VA rating letter showing 100% disability (dated January 1 of tax year)
Idaho driver's license or state ID
Property deed or mortgage documents
DD-214 (Certificate of Release or Discharge from Active Duty)
Completed county application form

Where to apply:

Ada County (Boise)

Assessor's Office: (208) 287-7200
Address: 200 W. Front Street, Boise, ID 83702
Online: adacounty.id.gov/assessor

Kootenai County (Coeur d'Alene)

Assessor's Office: (208) 446-1500
Address: 451 N. Government Way, Coeur d'Alene, ID 83814

Canyon County (Nampa)

Assessor's Office: (208) 454-7431
Address: 111 N. 11th Avenue, Suite 260, Caldwell, ID 83605

Bonneville County (Idaho Falls)

Assessor's Office: (208) 529-1350
Address: 605 N. Capital Avenue, Idaho Falls, ID 83402

Online application: Idaho State Tax Commission - tax.idaho.gov/proptaxrelief

Processing time: 30-60 days, applied to December property tax bill

Annual renewal: Required every year by April 15, unless you have permanent and total disability status (then automatic renewal)

State Income Tax Exemption (Military Retirement)

No application required. When filing your Idaho state income tax return (Form 40), military retirement pay is automatically excluded from taxable income under the retirement benefits deduction.

How to file:

Online: tax.idaho.gov
Idaho State Tax Commission: (208) 334-7660
Mail: Idaho State Tax Commission, PO Box 36, Boise, ID 83722-0410

When filing: Report military retirement pay on your federal return (Form 1040) but exclude it from Idaho state return using retirement benefits deduction (Schedule A, Line 9)

Tax software: Most tax software (TurboTax, H&R Block, TaxAct) automatically handles Idaho's military retirement exemption

Frequently Asked Questions

Does Idaho tax military retirement pay?

No. As of 2025, Idaho completely exempts military retirement pay from state income tax for all ages. Previously (before 2025), you had to be age 65+ or age 62+ with disabilities. The 2025 law eliminates these restrictions.

Can I get the property tax reduction if I'm rated 90%?

No. Idaho's property tax reduction requires a 100% disability rating. At 90% or below, you receive no property tax reduction benefit. Idaho doesn't offer graduated reductions like some states.

What if I'm 100% Individual Unemployability (IU)?

Yes, you qualify. Idaho's property tax reduction applies to 100% disability ratings whether P&T, IU, or temporary. As long as the VA rates you 100%, you qualify for up to $1,500 reduction.

Is the $1,500 property tax reduction the same in every county?

Yes, the reduction is up to $1,500 statewide. However, if your property tax bill is less than $1,500, the reduction is limited to your actual tax bill (can't go below zero).

Do I have to reapply every year?

Yes, by April 15 annually - unless you have permanent and total disability status documented by the VA. Veterans with P&T status receive automatic renewal but must notify the county if they move.

Can I afford Idaho on military retirement alone?

It depends on location and disability rating:

Boise: Difficult without additional income or 100% disability
Smaller cities (Pocatello, Idaho Falls, Twin Falls): Yes, if you're 100% disabled or willing to work part-time
General rule: You need $45K+ income (retirement + disability) for comfortable single living, $70K+ for family in Boise

Does Idaho tax Social Security benefits?

No. Idaho does not tax Social Security benefits, which is a significant advantage over states like Colorado, Montana, and Utah.

How does Idaho compare to Washington state for veterans?

Idaho advantages: Lower housing costs (except Boise vs. Eastern WA), no sales tax on groceries, property tax reduction for disabled veterans, complete military retirement exemption

Washington advantages: No state income tax at all (but Washington has higher property taxes and 6.5%+ sales tax on everything including groceries)

Bottom line: Idaho is better for military retirees with substantial retirement income. Washington is better for high-earning working professionals.

Can I use a VA loan to buy in Idaho?

Yes. VA loans work in Idaho with no down payment required for eligible veterans. Given Idaho's rising home prices ($500K+ in Boise), ensure you can afford the monthly payment before committing.

Should I move to Idaho as a veteran?

Come to Idaho if:

You want conservative, military-friendly culture
You work at Mountain Home AFB or federal/state job
You're 100% disabled (property tax reduction helps)
You're willing to live in smaller cities (affordable)
You value low taxes and outdoor recreation

Don't come to Idaho if:

You expect cheap Boise housing (that's 2015, not 2025)
You're expecting California wages in Idaho (salaries are 20-30% lower)
You need big-city amenities and culture
You have limited income (under $40K single, under $60K family)

How is the housing market in Idaho?

Boise metro: Hot market, prices up 60-80% since 2019, median now $500K-$547K, inventory low, competitive

Smaller cities: More affordable ($320K-$370K), slower appreciation, better inventory

Trend: Boise is attracting California/Washington transplants working remotely, driving prices up. Smaller cities remain accessible but are slowly increasing.

What's the property tax rate in my county?

See the table in the "Property Tax Rates by County" section above. Rates range from 0.52% (Kootenai) to 0.85% (Canyon), with Ada County (Boise) at 0.59%. All Idaho homeowners also receive a 50% exemption on the first $125,000 of home value, which reduces effective rates.

Key Takeaways

Military retirement pay is 100% state tax exempt (as of 2025, no age restrictions) - this is Idaho's biggest veteran financial benefit
100% disabled veterans get up to $1,500 property tax reduction annually - most valuable in high-cost areas like Boise and Coeur d'Alene
No reductions for <100% disabled - if you're 90% or below, you get no property tax benefit (only the income tax exemption)
Idaho is no longer "cheap" - Boise area median home is $500K-$547K, up 60-80% since 2019. Smaller cities ($320K-$370K) remain affordable.
Cost of living is 2-5.5% above national average - far lower than California, Washington, Oregon, Colorado
Tax benefits DO offset living costs - saving $3,000-$4,500 annually on taxes makes Idaho very veteran-friendly
Smaller cities are highly affordable - Pocatello, Idaho Falls, Twin Falls offer good quality of life on typical military retirement income
Boise requires additional income - $75K-$100K household income recommended for comfortable family living in Boise metro
Strong military culture - Idaho is conservative, pro-military, with growing veteran community around Mountain Home AFB
Annual application required - Don't forget to reapply for property tax reduction by April 15 each year (unless you have P&T status)

Idaho offers real, meaningful tax benefits to veterans. The complete military retirement exemption saves $1,500-$3,000 annually for most retirees. The property tax reduction (up to $1,500) is valuable for 100% disabled veterans. Combined with reasonable cost of living in smaller cities, Idaho is an excellent choice for military retirees willing to live outside the expensive Boise metro area.

Final recommendation: Visit Idaho for 2-4 weeks before relocating. Spend time in both Boise and smaller cities (Idaho Falls, Pocatello, Twin Falls) to see which fits your budget and lifestyle. Boise offers more amenities but higher costs. Smaller cities offer affordability and quality of life. Run your personal budget before committing - the math should work before you move.

Resources

Idaho Division of Veterans Services: (208) 780-1300 | veterans.idaho.gov
Idaho State Tax Commission: (208) 334-7660 | tax.idaho.gov
Property Tax Relief Application: tax.idaho.gov/proptaxrelief
VA Boise Healthcare: (208) 422-1000 | va.gov/boise-health-care
County assessor offices: Contact your county assessor for property tax reduction applications and details

Information current as of January 2025. Tax laws, property values, and benefit details may change. Verify specific details with your county assessor and the Idaho State Tax Commission.

Idaho Veteran Benefits 2025: Property Tax Reduction, Income Tax Exemption & Affordable Living

This guide breaks down exactly what Idaho offers veterans and what it costs to live here in 2025.

Bottom Line Up Front

Here's what Idaho offers veterans:

State income tax on military retirement: 0% - completely exempt (NEW: no age requirement as of 2025)
Property tax reduction for 100% disabled veterans: Up to $1,500 annually on primary residence
Property tax reduction for <100% disabled: None - must be rated 100% service-connected
Sales tax: 6% state rate (some cities add local sales tax)
Idaho state income tax rates: 5.8% flat rate (but military retirement exempt)
Vehicle registration: Standard rates, no special veteran discount

Potential annual savings for 100% disabled veteran: Up to $1,500 in property taxes, plus state income tax savings on military retirement (approximately $2,000-$3,000 for average retiree)

Income Tax Treatment for Veterans

Military Retirement Pay - 100% Exempt (2025 Expansion)

What changed in 2025:

Before 2025: Military retirees had to be age 65+, or age 62+ with disabilities, to claim the exemption
After 2025: Military retirement pay is exempt regardless of age or disability status
Law signed by Governor Brad Little on March 6, 2025, with April amendment

What this means:

Military retirement pay: 100% exempt from state tax (any age)
VA disability compensation: Tax-free (federally and state)
Civilian employment income: Taxable at Idaho rates (5.8% flat)
Investment income: Taxable at Idaho rates
Social Security: Partially taxable (depends on income level)

Example: An E-8 retiree age 40 with 20 years receiving $35,000 annual military retirement pays $0 Idaho state income tax on that retirement income.

Comparison to nearby states:

Washington: No state income tax (but high sales tax and property taxes)
Oregon: Taxes military retirement (9% top rate, though deduction available)
Montana: Taxes military retirement (6.75% top rate)
Utah: Partial exemption for military retirement

Idaho's complete exemption is a significant advantage over neighboring states like Oregon and Montana.

Idaho State Income Tax Rates (2025)

What the 5.8% flat rate means:

All taxable income taxed at 5.8% (after deductions)
Standard deduction: $14,600 (single), $29,200 (married filing jointly)
No graduated brackets anymore

For veterans:

Military retirement income: Exempt (not subject to 5.8% rate)
Civilian job income: Taxable at 5.8%
Post-retirement employment: Taxable at 5.8%

Example: Veteran earning $60,000 from civilian job

Taxable income after standard deduction: ~$45,400
Idaho state tax: ~$2,633 annually
But $0 tax on military retirement regardless of amount

Other Retirement Income

Public and private pension income: Also exempt from Idaho state income tax

401(k) and IRA withdrawals: Fully taxable at 5.8% rate

Social Security benefits: Idaho does not tax Social Security benefits (big advantage over states like Colorado, Montana, Utah)

Investment income: Fully taxable at 5.8%

The strategy: If you're living in Idaho on retirement income, maximize military pension and Social Security (both exempt), minimize 401(k)/IRA withdrawals (taxable at 5.8%).

Federal Income Tax Still Applies

Property Tax Reduction for Veterans

100% Disabled Veterans - Up to $1,500 Reduction

Veterans rated 100% disabled by the VA qualify for up to $1,500 annual property tax reduction on their primary residence and up to one acre of land.

How it works:

Reduction applies to your primary residence only
Maximum reduction: $1,500 per year
Must be rated 100% service-connected disabled (P&T or Individual Unemployability qualifies)
Must own and occupy the home as primary residence
Property must have homeowner's exemption
No income limits (unlike some states)

Important: This is a reduction, not an exemption. You still pay property taxes, but get up to $1,500 knocked off your annual bill.

Real-World Examples by County

Ada County (Boise area)

Home market value: $500,000 (median in Boise 2025)
Assessed value: $500,000
Exemption (50% owner-occupied, up to $125K): $125,000
Net taxable value: $375,000
Property tax rate: ~0.59% ($5.90 per $1,000)
Without veteran reduction: $2,213 annually
With 100% disabled veteran reduction: $713 annually
Annual savings: $1,500

Home value: $350,000 (Idaho Falls typical)

Net taxable value after homeowner exemption: $225,000
Without veteran reduction: $1,845 annually (at 0.82% rate)
With 100% disabled veteran reduction: $345 annually
Annual savings: $1,500

Home value: $250,000 (smaller city)

Net taxable value: $125,000
Without veteran reduction: $863 annually (at 0.69% avg rate)
With 100% disabled veteran reduction: $0 (reduction exceeds tax bill)
Annual savings: $863

Disability Ratings Below 100% - No Reduction

Idaho's property tax reduction for veterans is binary:

100% disabled: Up to $1,500 reduction
90% or lower: No property tax reduction whatsoever

Annual Application Required

Unlike some states with "one-and-done" exemptions, Idaho requires veterans to reapply each year for the property tax reduction.

Application deadline: April 15 annually

Where to apply: Your county assessor's office

Documents needed:

Current VA rating letter showing 100% service-connected disability (dated January 1 of tax year)
Idaho driver's license or state ID
Property deed or mortgage documents showing ownership
DD-214 (Certificate of Release or Discharge from Active Duty)
Completed application form (varies by county)

Online application: Idaho State Tax Commission offers online applications at tax.idaho.gov/proptaxrelief

Processing time: 30-60 days typically, applied to your December tax bill

Surviving Spouses

A surviving spouse of a 100% disabled veteran may continue to claim the property tax reduction if:

The veteran was receiving the reduction at time of death
Spouse remains unmarried
Spouse continues to own and occupy the home as primary residence
Spouse applies annually (or has permanent status)

This benefit can save surviving spouses up to $1,500 annually and help them afford to remain in their homes.

Idaho's Homeowner Exemption (All Residents)

Idaho offers a generous 50% homeowner exemption to all owner-occupants, up to $125,000 of assessed value.

How it works:

First $125,000 of home value: 50% exempt (so $62,500 exempt)
Reduces property tax for all homeowners
Separate from veteran property tax reduction (you get both if 100% disabled)

Example: Non-disabled veteran with $400,000 home in Boise

Assessed value: $400,000
Homeowner exemption (50% of first $125K): $62,500
Taxable value: $337,500
Property tax rate: 0.59% (Ada County)
Annual property tax: $1,991

With 100% disabled veteran reduction: $491 annually (save $1,500)

Property Tax Rates by County (2025)

Idaho's property tax rates vary significantly by county. Here are the rates for counties with significant veteran populations:

County	Effective Rate	Rate per $1,000	Median Home Price	Avg Annual Tax
Ada (Boise)	0.59%	$5.90	$500,000	~$2,200
Kootenai (Coeur d'Alene)	0.52%	$5.20	$575,000	~$2,340
Canyon (Nampa)	0.85%	$8.50	$420,000	~$2,635
Bonneville (Idaho Falls)	0.82%	$8.20	$350,000	~$2,238
Bannock (Pocatello)	0.69%	$6.90	$325,000	~$1,749
Twin Falls	0.69%	$6.90	$365,000	~$1,963

Key insights:

Ada County (Boise) has moderate rates but high home values
Canyon County (Nampa) has highest rate in major metro
Smaller cities have lower home values offsetting higher rates
100% disabled veterans save $1,500 annually regardless of county

Statewide average: 0.69% (or $6.90 per $1,000), which is 33rd-lowest in the nation

Compare to neighboring states:

Oregon: 0.87% average (higher)
Washington: 0.84% average (higher)
Montana: 0.74% average (slightly higher)
Utah: 0.57% average (lower)

Idaho's property taxes are reasonable compared to regional neighbors, though rising home values have increased total tax bills.

Sales Tax - 6% State Rate

Idaho has a 6% state sales tax on most goods and services. This is middle-of-the-road nationally.

Local sales taxes: Some cities add up to 3% local sales tax

Boise: 6% (no local add-on)
Idaho Falls: 6%
Most cities: 6-7% total

What's taxed:

Retail goods (clothing, electronics, household items)
Restaurant meals
Hotel stays
Vehicle purchases (but may qualify for tax credit)

What's not taxed:

Groceries: Tax-free (big advantage - most states tax groceries)
Prescription drugs: Tax-free
Medical services: Tax-free

For veterans: No special sales tax exemptions. Veterans pay the same rate as all residents.

Practical impact: You'll pay 6-7% sales tax on most purchases, but groceries are exempt (saving ~$300-600 annually for families compared to states that tax food).

Comparison to neighbors:

Washington: 6.5% state + local (up to 10.4% total in Seattle)
Montana: 0% sales tax (advantage Montana)
Oregon: 0% sales tax (advantage Oregon)
Utah: 6.1% state + local

Idaho's sales tax is moderate but higher than Montana and Oregon (which have no sales tax).

Vehicle Registration and Licensing

Idaho does not offer special vehicle registration discounts or fee waivers for veterans.

Standard fees:

Registration: Based on age, weight, and value of vehicle
Typical cost: $50-$150 annually for passenger vehicles
License plates: ~$25 every 7 years

Disabled veteran plates: Available for free to 100% disabled veterans

Purple Heart plates: Available
POW plates: Available
No registration fee reduction, just commemorative plates

How to get veteran plates: Idaho Division of Motor Vehicles (DMV) with DD-214 and VA documentation

Comparison to other states: Many states offer vehicle registration discounts or exemptions for disabled veterans. Idaho does not, which is a missed opportunity.

Cost of Living Reality Check

Idaho Cost of Living Index: 102-105.5

What this means: Living in Idaho costs 2-5.5% more than the U.S. average (depending on source and location).

Comparison: If your expenses in an average-cost state are $3,000/month, expect to pay $3,060-$3,165/month in Idaho.

This is far lower than high-cost states:

California: 138 (38% above average)
Washington: 113 (13% above average)
Colorado: 105 (5% above average)
Oregon: 115 (15% above average)

Idaho remains more affordable than its West Coast neighbors, but the gap is narrowing.

Housing Costs (2025) - The Big Story

Idaho's housing market has experienced explosive growth, particularly in the Boise metro area. What was once an affordable housing market is now expensive by regional standards.

Boise/Ada County:

Median single-family home: $500,000 - $547,000 (up 11.7% in 2025)
Median condo: ~$350,000 - $400,000
Rent (1BR apartment): $1,200 - $1,600/month
Rent (2BR apartment): $1,400 - $1,900/month
Rent (3BR house): $1,800 - $2,600/month

Historical context: Boise's median home was ~$300,000 in 2019. It's increased 67-80% in just 5-6 years.

Nampa/Canyon County (Boise suburbs):

Median home: $406,000 - $490,000
More affordable than Boise but still expensive
Rent (2BR): $1,200 - $1,700/month

Coeur d'Alene/Kootenai County (North Idaho):

Median home: $575,000 (more expensive than Boise)
Popular resort town, influx from California/Washington
Rent (2BR): $1,400 - $2,000/month

Idaho Falls/Bonneville County:

Median home: $350,000 (more affordable)
Stable market, less growth pressure
Rent (2BR): $1,000 - $1,400/month

Pocatello/Bannock County:

Median home: $318,000 - $335,000 (most affordable major city)
University town (Idaho State)
Rent (2BR): $900 - $1,300/month

Twin Falls County:

Median home: $365,000 - $450,000 (mid-range)
Agricultural/regional center
Rent (2BR): $1,000 - $1,400/month

Groceries: Tax-Free (Big Advantage)

Idaho does not tax groceries, which is a significant advantage over many states.

Real costs (Boise, 2025):

Gallon of milk: $3.50 - $4.50
Dozen eggs: $3.00 - $4.50
Loaf of bread: $2.50 - $4.00
Pound of ground beef: $5.00 - $7.00
Gallon of gas: $3.20 - $3.80
Pound of chicken breast: $4.00 - $6.00

Monthly grocery bill:

Single person: $350 - $500
Family of four: $800 - $1,200

These costs are roughly at national average or slightly higher.

Why food costs are reasonable: Idaho produces agriculture locally (potatoes, beef, dairy), reducing shipping costs. Being tax-free adds 6-10% savings compared to states that tax groceries.

Utilities: Reasonable

Idaho's utility costs are moderate compared to the national average.

Electricity:

Average rate: $0.10 - $0.11 per kWh (2025)
National average: $0.17 per kWh
Idaho is 35-40% cheaper than national average

Monthly electricity bill:

Small apartment (600 sq ft): $60 - $90
House (1,500 sq ft): $100 - $150
House with AC (summer): $150 - $200

Why electricity is affordable: Idaho generates 50% of electricity from hydroelectric (cheap), plus natural gas and wind.

Natural gas: $50 - $120/month (winter heating)

Water/Sewer: Varies by city

Boise: $60 - $100/month typical
Smaller cities: $40 - $80/month

Internet/Phone: Similar to national average ($60 - $120/month for internet)

Total utilities: $200 - $350/month typical for house

Transportation

Gas: $3.20 - $3.80/gallon (2025)

Middle of the road nationally
Lower than California ($4.50+) and Washington ($4.00+)

Car insurance: Slightly below national average

Full coverage: $1,200 - $1,800/year typical
Idaho has lower insurance costs than coastal states

Vehicle costs: Idaho requires personal vehicle ownership (limited public transit outside Boise). Budget $200-$400/month for gas, insurance, maintenance.

Healthcare

Healthcare costs: 5-10% below national average (advantage Idaho)

Doctor visits: $100 - $175
Specialist visits: $150 - $250
Emergency room: $1,000 - $3,000

VA healthcare: Available at no cost for eligible veterans (see companion guide on Idaho VA facilities)

Health insurance: Premiums slightly below national average

Financial Impact Analysis: Can You Afford Idaho?

Let's calculate real financial scenarios for veterans considering Idaho.

Scenario 1: E-7 Retiree, 20 Years Service, 100% P&T Disabled (Boise)

Annual income:

Military retirement: $30,000 (state tax exempt)
VA disability (100% P&T): $44,844 (tax-free)
Total: $74,844

Idaho 20-Year Financial Impact

Benefit	Annual Savings	20-Year Total
No state income tax on $30K retirement	$1,740 (vs 5.8% rate)	$34,800
Property tax reduction ($500K Boise home)	$1,500	$30,000
TOTAL SAVINGS	$3,240	$64,800

The Cost Reality

Annual costs (Boise - family lifestyle):

Housing (mortgage on $500K home, 20% down): $2,800/month = $33,600/year
Property tax (after $1,500 reduction): $700/year
Groceries: $900/month = $10,800/year
Utilities: $250/month = $3,000/year
Transportation: $350/month = $4,200/year
Healthcare (with VA): $1,000/year
Total annual expenses: $53,300

Income vs. Expenses:

Total income: $74,844
Total expenses: $53,300
Surplus: $21,544/year

Feasibility: Yes, this works - especially with 100% property tax reduction and no state tax on retirement. Boise is affordable for this income level.

Scenario 2: E-8 Retiree, 20 Years, 50% Disabled, Working Spouse (Idaho Falls)

Annual income:

Military retirement: $35,000 (state tax exempt)
VA disability (50%): $10,856 (tax-free)
Veteran's job: $50,000 (state taxable)
Spouse's job: $45,000 (state taxable)
Total: $140,856

Tax impact:

Idaho state tax on $95K combined civilian income: ~$4,814
Savings from military retirement exemption: ~$2,030
Property tax ($350K Idaho Falls home): $1,845 (no veteran reduction at 50%)

Annual costs (Idaho Falls - family lifestyle):

Housing (mortgage on $350K home): $2,200/month = $26,400/year
Property tax: $1,845/year
Groceries: $900/month = $10,800/year
Utilities: $200/month = $2,400/year
Transportation: $300/month = $3,600/year
Healthcare: $1,500/year
State income tax: $4,814/year
Total annual expenses: $51,359

Income vs. Expenses:

Total income: $140,856
Total expenses: $51,359
Surplus: $89,497/year (substantial)

Feasibility: Excellent - dual income with military retirement provides very comfortable lifestyle in smaller Idaho cities.

Scenario 3: O-5 Retiree, 20 Years, 70% Disabled, Single (Coeur d'Alene)

Annual income:

Military retirement: $55,000 (state tax exempt)
VA disability (70%): $17,708 (tax-free)
Part-time work: $30,000 (state taxable)
Total: $102,708

Tax impact:

Idaho state tax on $30K civilian income: ~$893
Savings from military retirement exemption: ~$3,190
Property tax ($575K Coeur d'Alene home): $2,340 (no reduction at 70%)

Annual costs (Coeur d'Alene - single):

Housing (mortgage on $575K home, 20% down): $3,200/month = $38,400/year
Property tax: $2,340/year
Groceries: $400/month = $4,800/year
Utilities: $200/month = $2,400/year
Transportation: $250/month = $3,000/year
Healthcare: $1,000/year
State income tax: $893/year
Total annual expenses: $52,833

Income vs. Expenses:

Total income: $102,708
Total expenses: $52,833
Surplus: $49,875/year

Feasibility: Yes, comfortable - even in expensive Coeur d'Alene with 70% disability (no property tax reduction).

Who Can Afford Idaho Financially?

You can likely afford Idaho if:

Combined household income $70K+ (Boise), $60K+ (smaller cities)
You're 100% disabled (property tax reduction helps)
You have dual income household
You're willing to live outside Boise metro (Idaho Falls, Pocatello, Twin Falls)
You work federal/state job or Mountain Home AFB

You might struggle in Idaho if:

You're single income retiring E-6 or below (under $30K retirement)
You're targeting expensive areas (Boise, Coeur d'Alene) without substantial income
You have no disability rating (miss property tax reduction)
You expect to live on military retirement alone in Boise

The Realistic Math

Income needed to live comfortably in Idaho:

Boise (family of 4): $75,000 - $100,000
Smaller cities (family of 4): $60,000 - $80,000
Single person anywhere: $45,000 - $65,000

Median household income in Idaho: $69,000

Above the "small city comfortable" threshold
Below "Boise comfortable" threshold

Most military retirees earn: $30,000 - $50,000 military retirement + VA disability

Boise requires additional employment
Smaller cities are accessible on retirement alone if 100% disabled

How to Claim Your Benefits

Property Tax Reduction (100% Disabled Veterans)

Timeline: Apply by April 15 annually with your county assessor

Required documents:

Current VA rating letter showing 100% disability (dated January 1 of tax year)
Idaho driver's license or state ID
Property deed or mortgage documents
DD-214 (Certificate of Release or Discharge from Active Duty)
Completed county application form

Where to apply:

Ada County (Boise)

Assessor's Office: (208) 287-7200
Address: 200 W. Front Street, Boise, ID 83702
Online: adacounty.id.gov/assessor

Kootenai County (Coeur d'Alene)

Assessor's Office: (208) 446-1500
Address: 451 N. Government Way, Coeur d'Alene, ID 83814

Canyon County (Nampa)

Assessor's Office: (208) 454-7431
Address: 111 N. 11th Avenue, Suite 260, Caldwell, ID 83605

Bonneville County (Idaho Falls)

Assessor's Office: (208) 529-1350
Address: 605 N. Capital Avenue, Idaho Falls, ID 83402

Online application: Idaho State Tax Commission - tax.idaho.gov/proptaxrelief

Processing time: 30-60 days, applied to December property tax bill

Annual renewal: Required every year by April 15, unless you have permanent and total disability status (then automatic renewal)

State Income Tax Exemption (Military Retirement)

No application required. When filing your Idaho state income tax return (Form 40), military retirement pay is automatically excluded from taxable income under the retirement benefits deduction.

How to file:

Online: tax.idaho.gov
Idaho State Tax Commission: (208) 334-7660
Mail: Idaho State Tax Commission, PO Box 36, Boise, ID 83722-0410

When filing: Report military retirement pay on your federal return (Form 1040) but exclude it from Idaho state return using retirement benefits deduction (Schedule A, Line 9)

Tax software: Most tax software (TurboTax, H&R Block, TaxAct) automatically handles Idaho's military retirement exemption

Frequently Asked Questions

Does Idaho tax military retirement pay?

Can I get the property tax reduction if I'm rated 90%?

No. Idaho's property tax reduction requires a 100% disability rating. At 90% or below, you receive no property tax reduction benefit. Idaho doesn't offer graduated reductions like some states.

What if I'm 100% Individual Unemployability (IU)?

Yes, you qualify. Idaho's property tax reduction applies to 100% disability ratings whether P&T, IU, or temporary. As long as the VA rates you 100%, you qualify for up to $1,500 reduction.

Is the $1,500 property tax reduction the same in every county?

Yes, the reduction is up to $1,500 statewide. However, if your property tax bill is less than $1,500, the reduction is limited to your actual tax bill (can't go below zero).

Do I have to reapply every year?

Can I afford Idaho on military retirement alone?

It depends on location and disability rating:

Boise: Difficult without additional income or 100% disability
Smaller cities (Pocatello, Idaho Falls, Twin Falls): Yes, if you're 100% disabled or willing to work part-time
General rule: You need $45K+ income (retirement + disability) for comfortable single living, $70K+ for family in Boise

Does Idaho tax Social Security benefits?

No. Idaho does not tax Social Security benefits, which is a significant advantage over states like Colorado, Montana, and Utah.

How does Idaho compare to Washington state for veterans?

Idaho advantages: Lower housing costs (except Boise vs. Eastern WA), no sales tax on groceries, property tax reduction for disabled veterans, complete military retirement exemption

Washington advantages: No state income tax at all (but Washington has higher property taxes and 6.5%+ sales tax on everything including groceries)

Bottom line: Idaho is better for military retirees with substantial retirement income. Washington is better for high-earning working professionals.

Can I use a VA loan to buy in Idaho?

Yes. VA loans work in Idaho with no down payment required for eligible veterans. Given Idaho's rising home prices ($500K+ in Boise), ensure you can afford the monthly payment before committing.

Should I move to Idaho as a veteran?

Come to Idaho if:

You want conservative, military-friendly culture
You work at Mountain Home AFB or federal/state job
You're 100% disabled (property tax reduction helps)
You're willing to live in smaller cities (affordable)
You value low taxes and outdoor recreation

Don't come to Idaho if:

You expect cheap Boise housing (that's 2015, not 2025)
You're expecting California wages in Idaho (salaries are 20-30% lower)
You need big-city amenities and culture
You have limited income (under $40K single, under $60K family)

How is the housing market in Idaho?

Boise metro: Hot market, prices up 60-80% since 2019, median now $500K-$547K, inventory low, competitive

Smaller cities: More affordable ($320K-$370K), slower appreciation, better inventory

Trend: Boise is attracting California/Washington transplants working remotely, driving prices up. Smaller cities remain accessible but are slowly increasing.

What's the property tax rate in my county?

Key Takeaways

Military retirement pay is 100% state tax exempt (as of 2025, no age restrictions) - this is Idaho's biggest veteran financial benefit
100% disabled veterans get up to $1,500 property tax reduction annually - most valuable in high-cost areas like Boise and Coeur d'Alene
No reductions for <100% disabled - if you're 90% or below, you get no property tax benefit (only the income tax exemption)
Idaho is no longer "cheap" - Boise area median home is $500K-$547K, up 60-80% since 2019. Smaller cities ($320K-$370K) remain affordable.
Cost of living is 2-5.5% above national average - far lower than California, Washington, Oregon, Colorado
Tax benefits DO offset living costs - saving $3,000-$4,500 annually on taxes makes Idaho very veteran-friendly
Smaller cities are highly affordable - Pocatello, Idaho Falls, Twin Falls offer good quality of life on typical military retirement income
Boise requires additional income - $75K-$100K household income recommended for comfortable family living in Boise metro
Strong military culture - Idaho is conservative, pro-military, with growing veteran community around Mountain Home AFB
Annual application required - Don't forget to reapply for property tax reduction by April 15 each year (unless you have P&T status)

Resources

Idaho Division of Veterans Services: (208) 780-1300 | veterans.idaho.gov
Idaho State Tax Commission: (208) 334-7660 | tax.idaho.gov
Property Tax Relief Application: tax.idaho.gov/proptaxrelief
VA Boise Healthcare: (208) 422-1000 | va.gov/boise-health-care
County assessor offices: Contact your county assessor for property tax reduction applications and details

Information current as of January 2025. Tax laws, property values, and benefit details may change. Verify specific details with your county assessor and the Idaho State Tax Commission.