Purpose of the Bill

The bill aims to modify property tax refund formulas for homeowners in Minnesota by adjusting the homestead credit refund system. This change is intended to lessen the financial burden of property taxes on homeowners relative to their household income.

Main Provisions

• Adjustment of Refund Levels: The bill revises the existing thresholds and percentages used to calculate the homeowner’s obligation and the corresponding state refund. Specifically, it modifies the percentage of income that determines eligibility for property tax refunds and the maximum refund a household can receive.
• Income Brackets and Refund Rates: The bill categorizes household incomes into various brackets, each with designated percentages that stipulate the share of property tax liabilities homeowners need to pay versus what the state will refund. The percentage that the homeowner must pay increases at higher income levels, while maximum refunds decrease for wealthier households.
• Limits on Eligibility: Households with income exceeding $135,410 or $143,140, depending on certain conditions, are ineligible for refunds. This creates an upper income threshold for qualification.

Significant Changes to Existing Law

• The bill updates the previous refund structure by altering both the percentage of household income required to be paid by claimants and the state refund amounts depending on income levels. This restructuring aims to provide more relief to lower-income households.
• State refund limits are adjusted, with maximum refund amounts decreasing as household incomes rise.

Relevant Terms

homestead credit, property tax refund, household income, state refund, income brackets, tax relief, income thresholds.