Property taxes going up? You might have a refund coming

That howl you hear may be a chorus of homeowners who’ve just opened their property tax statements.

Yes, the question heard on many a doorstep during last year’s campaign – “Why are my property taxes going up so much?” – might be receiving a March reprise, as county treasurers are supposed to have those statements mailed out by the end of the month.

But did you know there’s something called a “targeting refund” designed for Minnesota homeowners whose property taxes increased more than 12% year over year? If the increase in your taxes fits into that category and is more than $100, then you could get a refund equal to 60% of the increase amount that’s above 12%. The maximum refund is $1,000.

But Rep. Matt Norris (DFL-Blaine) would like those refunds to be more generous. So he’s sponsoring HF2725, which would reduce the threshold to 8% and double the maximum refund to $2,000.

That permanent change would be effective for property taxes payable in 2024, but the bill would beef up the refund program even more on a onetime basis: For refunds on taxes payable in 2023, the increase in property taxes would only need to be 6%, and the maximum refund would be $2,500.

On Wednesday, the House Property Tax Division laid the bill over for possible inclusion in the division report to the House Taxes Committee.

“This is really super-charging the property tax refunds for homesteads,” Norris said. “It’s designed to really target those folks who are feeling the pain the most from the rising property tax bills and getting them some much needed relief.”

Nathan Jesson, intergovernmental relations representative for the League of Minnesota Cities, supports the bill.

“I think this approach makes sense, not only because of the surplus that the state currently has, but the high level of inflation that impacted city levies, combined with the rising residential valuations on homeowners,” he said. “It’s also important to look at proposals like this because they’re not going to cause tax shifts onto other properties.”

The Department of Revenue estimates the policy changes would result in property tax refunds paid out by the state increasing by $23.3 million in fiscal year 2024 and $4.1 million in fiscal year 2025.

Rep. Duane Quam (R-Byron) and Rep. Paul Anderson (R-Starbuck) both spoke in favor of the bill, with Anderson seeking clarification on how it would interact with other elements of a property tax bill, such as special assessments and school levies. He was assured that all state property tax refunds are based upon the net amount after all credits are applied.