HF4487

Purpose

Provide a one-time refund or credit for property taxes payable in 2026. The refund is funded by a general fund appropriation and paid by the Minnesota Department of Revenue to eligible taxpayers who applied by the deadline.

Main Provisions

• Onetime property tax refund for taxes payable in 2026:
  • Eligible local property taxes include: residential homestead (including manufactured homes classified as 1a or 1b), residential nonhomestead (classified as 4b or 4bb), apartment property (4a), agricultural homestead and nonhomestead (2a), rural vacant land (2b), and managed forest land (2c).
  • Eligible property taxes are the sum of eligible state general levy payments plus eligible local property taxes.
  • Property taxes payable means the tax amount due in 2026 after certain deductions and excluding penalties, interest, special assessments, and other specified state credits.
• Refund mechanics:
  • A taxpayer who paid eligible property taxes may apply to the Commissioner of Revenue for a refund of a portion of those taxes.
  • Application deadline: no later than September 15, 2026 (while the department may set the form and method, and must begin accepting applications by July 15, 2026).
  • The refund is paid within four weeks after a valid application.
  • Refund amount = refund percentage × the amount of eligible property taxes paid.
  • The refund percentage is published by July 1, 2026 and is determined as: appropriation for refunds divided by total eligible property taxes payable in 2026.
• Funding and administration:
  • An appropriation of $4,000,000,000 from the general fund is provided for fiscal year 2027 for these refunds.
  • If any of the appropriation remains unused on October 1, 2026, it may be used for property tax credits under a separate section.
  • The commissioner of revenue may transfer necessary funds to the commissioner of education to make certain payments under the related section.
• Unclaimed refunds:
  • If eligible taxes were paid but no one applied for a refund, the amount must be paid as a property tax credit on the property for taxes payable in 2027 (per the related section).

Significant Changes to Existing Law

• Establishes a new, onetime state-funded property tax refund program tied to 2026 taxes, with a separate funding mechanism and deadline structure.
• Introduces a published refund percentage based on a large appropriation relative to total eligible property taxes, rather than a fixed per-property amount.
• Creates an alternative path for unclaimed refunds by converting them into a credit on the property for the following year.

Practical Impact

• Property owners who paid 2026 property taxes on eligible property types may receive a refund, reducing the 2026 tax burden.
• The size of the refund depends on how much the Legislature allocates and the total eligible property taxes paid in 2026.
• Unclaimed refunds aren’t lost; they become credits on 2027 property taxes.

Relevant terms - one-time property tax refund - eligible property taxes - eligible local property taxes - residential homestead - manufactured homes - residential nonhomestead - apartment property - agricultural homestead and nonhomestead - rural vacant land - managed forest land - state general levy payments - property taxes payable - refund percentage - appropriation - Department of Revenue - Commissioner of Revenue - property tax credits - fiscal year 2027 - unclaimed refunds - July 1, 2026 - July 15, 2026 - September 15, 2026