Purpose

Expand the property tax refund program so that homeowners with a homestead property can receive an additional refund if their property taxes go up by a large amount from the previous year. The change targets homestead (owner-occupied) properties and creates a new calculation to help offset sizable tax increases.

Main Provisions

• Adds an “Additional refund” provision to Minnesota Statutes 2024 section 290A.04, subdivision 2h.
• Eligibility condition: For a homestead, if gross property taxes payable increase by more than six percent from the prior year and the dollar amount of that increase is at least $100, the homeowner qualifies for the additional refund.
• Calculation: The additional refund equals 60 percent of the amount by which the increase exceeds the greater of:
  • 6 percent of the prior year’s property taxes payable, or
  • $100.
• Cap: The text states a maximum refund under this subdivision, but the exact amount is unclear in the provided text (appears as two figures, 1,000 and 2,500). The intended cap cannot be determined from the text as given.
• Effect on calculation: The “gross property taxes payable” used for determining eligibility and calculation is defined without regard to any refund awarded under this subdivision (i.e., the base tax amount is used before applying this refund).
• Exclusions: Increases caused by improvements made to the homestead after the assessment date for the prior year’s taxes are not counted toward the increase.

Eligibility and Documentation

• Eligible property: A homestead (owner-occupied property) that is owned and occupied by the same owner on January 2 of both the prior year and the current year.
• Required proofs: In addition to other proofs required by the chapter, claimants must file a copy of the prior year’s property tax statement or other documents required by the commissioner with the refund claim.

Administrative Details

• Data sharing: If requested, county officials must provide the names and addresses of property taxpayers who may be eligible for the additional refund. Information must be provided electronically.
• Costs and use of data: The county may charge a reasonable fee to cover the cost of preparing the data. The information may only be used to notify homeowners of potential eligibility and to assist them, at no charge, in preparing a refund claim.

Changes to Existing Law

• Expands and targets the property tax refund to address large increases on homestead properties.
• Introduces a new calculation method (60% of the portion of the increase above the greater of 6% of prior year’s taxes or $100).
• Adds documentation and data-sharing requirements tied to this new refund.
• Clarifies the definition of gross property taxes payable for the purposes of this subdivision and specifies exclusions for certain improvements.

Practical Impact

• More homeowners with substantiating large tax increases on their primary residence could qualify for an extra refund.
• The exact cap on the additional refund needs confirmation from the final text due to unclear transcription.
• Homeowners must provide documentation and may benefit from county-provided assistance in applying.

Relevant Terms - homestead - property taxes payable - gross property taxes payable - additional refund - Subdivision 2h - six percent (6%) - dollar threshold ($100) - improvement after the assessment date - January 2 (ownership/occupancy date) - prior year - refund claim - documentation requirements - property tax statement - county official - electronic data sharing - data privacy/use restrictions - maximum refund cap (ambiguous in provided text) - Minnesota Statutes 2024 § 290A.04 Subd. 2h