Repeal of Homestead Tax Credit
Due to the special session, the Homestead Tax Credit was repealed, resulting in the elimination of $365 million in tax relief for Minnesota property owners.
In place of the Homestead Tax Credit, Minnesota’s Republican majority supported a Market Value Homestead exclusion which will preserve some of the rebate but ultimately will result in property tax increases for homeowners and businesses across Minnesota.
“The new system will hurt businesses and homeowners. This is indeed a tax increase on all counties, including Anoka and Ramsey. Based on nonpartisan property tax modeling, residents in these counties will see a property tax increase of 2.6% – 6.2% next year (this includes the cut to local government aid and the repeal of the Homestead Tax Credit) depending on the value of the home,” said Sen. Goodwin. “Instead of a slight increase in income taxes on millionaires, as Governor Dayton had proposed, Republicans chose to balance the budget by raising property taxes.”
For 44 years, the state has partnered with local government in giving relief to property taxpayers in the form of a credit. That credit was then used to offset a portion of the property tax, up to $304 for some homeowners. Sen. Goodwin believes some politicians will try to argue that local governments are responsible for the property tax increase. “Anyone who denies the state is responsible for what has been done to homeowners, businesses and local units of government are simply passing the buck,” said Sen. Goodwin.
Even renters will see a property tax increase. Approximately 400,000 Minnesotans who have received benefits from the renter’s refund program will see their rebates cut by an average of $85 per year. “For many renters, this additional $85 dollars was a trip to the grocery store or money they would tuck away for a rainy day,” said Sen. Goodwin.