Minnesota's seniors could see property tax increases capped under House bill

“What I’m hearing at the doors” is a phrase that legislators frequently use. It means that, when they go door knocking while seeking re-election (or, for the rookies, election), this is an issue about which they get an earful.

Many have said that they frequently hear the lament that property taxes have been rising too rapidly for their constituents’ household budgets. Mind you, setting property tax levies is the responsibility of local units of government. But the state can offer tax credits to soften the blow.

Such as limiting the amount your property taxes can go up to no more than 8% a year. That’s what HF403 would do. It’s a bill sponsored by Rep. Andrew Myers (R-Tonka Bay) that would create a property tax credit for homestead property owned by someone age 65 or older.

On Wednesday, the House Taxes Committee laid the bill over for possible omnibus bill inclusion.

“Many retirees are on fixed incomes,” Myers said. “They’re seeing rising property taxes that are putting a financial strain on them. And some of these seniors we see have to sell their homes or cut back on essential expenses. …  This would kick in and hold their property taxes to no more than 8% [above] the prior year.”

Property owners would be required to own and occupy the property for at least one year before receiving the credit. The change would be effective with assessment year 2026 for taxes payable in 2027. Hence, the soonest for which the Revenue Department is projecting a General Fund impact is fiscal year 2028, when the bill’s changes would reduce the General Fund an estimated $8.4 million.

If members found that cost to be too high, Myers said the proposal could be scalable if they wanted to add income restrictions.

“I know we have a budget forecast coming out,” he continued. “I wanted to keep something that I thought was actionable.”

Eligible for the credit would be residential homesteads, certain community land trust property occupied as a homestead, and the portion of agricultural homesteads consisting of the house, garage, and 1 acre immediately surrounding them.

“We already have a similar program like this,” said Rep. Liz Lee (DFL-St. Paul). “I know that when I door knock and I talk to seniors in my community, I tell them that there is already a senior deferral program and it’s actually underutilized. So if this bill is really big and is something that we can’t budget for, maybe we can make sure that folks know that there is a program already that they could possibly qualify for.”