Homestead market value exclusion modification for certain years
Impact
The proposed changes in SF416 will likely lead to a decrease in property tax burdens for many homeowners, particularly those with properties valued at or below $95,000, as they will continue to benefit from a substantial 40% market value exclusion. Moreover, the bill temporarily increases property tax refund amounts for assessments payable in 2026 and 2027, directing more financial support to homeowners most in need based on income thresholds provided in the legislation. This approach aims to mitigate the financial impact of potential tax liabilities on families during the years specified.
Summary
SF416 is a legislative proposal aimed at modifying the current homestead market value exclusion framework within Minnesota's property tax system. Specifically, it seeks to amend existing statutes to introduce new valuation exclusion rates for homesteads based on their market value during assessment years 2025 and 2026. The new structure provides significant tax relief for lower-valued homesteads while modifying the exclusion criteria for mid-range valued properties. The bill establishes new thresholds that will affect how property tax refunds are calculated, especially for taxpayers with varied income levels.
Contention
While proponents of SF416 argue that the modifications will make property tax burdens more equitable, opponents may voice concerns regarding the long-term fiscal implications for state revenue. Adjusted tax refunds and valuation exclusions could lead to significant revenue reductions for local governments that rely on property taxes as a primary funding source. Additionally, some legislators might contend that the bill's income thresholds for refund eligibility may not adequately address the needs of all lower-income homeowners, thus resulting in a debate surrounding the sufficiency and equity of the proposed tax relief measures.
Property tax provisions modified, first-tier valuation limit for agricultural homestead properties modified, homestead resort property tier limits modified, homestead market value exclusion modified, and state general levy reduced.
Property taxes and individual income taxes modified, first-tier valuation limit for agricultural homestead properties modified, tier limits for homestead resort properties increased, homestead market value exclusion modified, state general levy reduced, unlimited Social Security subtraction allowed, temporary refundable child credit established, and money appropriated.
Income and property tax provisions modified, unlimited subtraction allowed for Social Security income, first and second tier income tax rates reduced by one percentage point, direct payments to taxpayers provided, valuation limit modified for property and homestead market value exclusion increased, and refundable child credit allowed.
Proposing a constitutional amendment authorizing the legislature to limit the maximum appraised value of residential real property for ad valorem tax purposes to 105 percent or more of the appraised value of the property for the preceding tax year, to exempt from ad valorem taxation the total appraised value of property purchased by an individual for the first tax year the individual qualifies the property as the individual's residence homestead if the property is the individual's first residence homestead and has an appraised value of less than $300,000, and to limit the total amount of ad valorem taxes that a political subdivision may impose on the residence homestead of an individual and the surviving spouse of the individual if the individual qualifies the property as the individual's residence homestead for at least 25 consecutive tax years.
Proposing a constitutional amendment authorizing the legislature to limit the maximum appraised value of residential real property for ad valorem tax purposes to 105 percent or more of the appraised value of the property for the preceding tax year, to exempt from ad valorem taxation the total appraised value of property purchased by an individual for the first tax year the individual qualifies the property as the individual's residence homestead if the property is the individual's first residence homestead and has an appraised value of less than $300,000, and to limit the total amount of ad valorem taxes that a political subdivision may impose on the residence homestead of an individual and the surviving spouse of the individual if the individual qualifies the property as the individual's residence homestead for at least 25 consecutive tax years.
Proposing a constitutional amendment authorizing the legislature to limit the maximum appraised value of residential real property for ad valorem tax purposes to 105 percent or more of the appraised value of the property for the preceding tax year, to exempt from ad valorem taxation the total appraised value of property purchased by an individual for the first tax year the individual qualifies the property as the individual's residence homestead if the property is the individual's first residence homestead and has an appraised value of less than $300,000, and to limit the total amount of ad valorem taxes that a political subdivision may impose on the residence homestead of an individual and the surviving spouse of the individual if the individual qualifies the property as the individual's residence homestead for at least 25 consecutive tax years.
Property tax provisions modified, first-tier valuation limit for agricultural homestead properties modified, homestead resort property tier limits modified, homestead market value exclusion modified, and state general levy reduced.