9 ways to trim your property taxes in 2023

Frederick Melo, Pioneer Press
·6 min read

Year after year, Ramsey County residents fail to collect as much as $25 million in property tax refunds, according to the Minnesota Department of Revenue.

Among the tax-shaving options out there — and there are several — is that anyone whose property tax burden goes up more than 12 percent in a single year can apply to the state for a special refund of up to $1,000, regardless of household income.

St. Paul officials say 2023 will be an especially important year to look into the special refund due to a court-driven shift in some $13 million in street maintenance charges from fees to property taxes.

In eight low- to moderate-income areas of the city, overall property taxes are likely to rise by 12 percent to 20 percent in 2023, according to calculations released by Ramsey County, while wealthier neighborhoods may see less impact.

Here’s a list of multiple refunds to look into.

Don’t live in Ramsey County? Check with your county assessor, and visit the state Department of Revenue property tax website at revenue.state.mn.us/property-taxes.

Homestead credits

Homeowners can declare a house with an estimated market value of $413,800 or less to be their homestead, or primary residence.

That qualifies you to receive an annual “circuit breaker” property tax credit of up to $3,140 from the state of Minnesota, as long as your household income is below $128,280. Even if your household income is higher, certain deductions can help you qualify for the refund or increase your refund amount: if you or your spouse is age 65 or older, or either one of you has a permanent or total disability, you have dependents or you contributed to a retirement account.

The average refund is about $1,100. To declare your home your homestead, visit the county’s website at tinyurl.com/HomesteadRamCO for an application, which must be submitted to the county with a copy of your deed, including the legal description.

Depending on your living situation, you may have to submit additional forms, such as a copy of your Certificate of Real Estate Value if you purchased your property in the last three months. The state provides more information on the homestead market value exclusion online at tinyurl.com/HomesteadMN.

Special refunds

Another commonly-overlooked benefit is a special homestead credit that the state offers to anyone whose property taxes go up more than 12 percent and $100 in a single year, regardless of household income.

The special refund is 60 percent of the amount of tax paid that exceeds the 12 percent increase, up to $1,000. It can be requested on top of the traditional homestead credit.

The property tax increase cannot be the result of home improvements. Look for “special property tax refund” instructions on your state property tax Form M1PR. More information is online at tinyurl.com/HomesteadMN.

Blind or permanently and totally disabled

State law allows a reduced property tax rate for blind or permanently and totally disabled property owners who homestead their property. File an application with the county assessor’s office. Visit the county website at tinyurl.com/HomesteadRamCO for instructions on homesteading for the disabled.

Tax exclusion for disabled veterans

This program provides a property tax exclusion for the homestead of an honorably discharged veteran who has a service-connected disability rating of 70 percent or higher. Surviving spouses of certain qualifying veterans and service members, as well as primary family caregivers of qualifying veterans, are also eligible.

Depending upon your status, the market value exclusion allows you to deduct up to $150,000 or up to $300,000 from the value of your home when calculating property taxes. Documentation must be filed with your county homestead application. See tinyurl.com/HomesteadRamCO.

Renter’s credit

Renters pay “implicit” property taxes, too, and that means they could be eligible for money back. The renter’s property tax refund program — sometimes called the renter’s credit — is a state-paid refund for low- to moderate-income renters. Renters whose household income exceeds $64,920 were not eligible in 2022, though deductions are allowed for dependents, seniors and the disabled. As income increases, the maximum refund decreases.

The maximum refund for claims filed in 2022 was $2,280, though the average refund tends to be around $700, or somewhat higher for seniors and the disabled. Refund claims are filed using state property tax Form M1PR. For more information, visit tinyurl.com/RenterCredit2022.

Senior deferral

Seniors whose household income is $60,000 or less and have homesteaded, or lived in, their home for 15 years or more can defer most of their property taxes.

The state of Minnesota will treat the deferred taxes as a loan, payable at the time the property is sold or enrollment is canceled, with variable interest not to exceed 5 percent. The property tax you pay will be 3 percent of your total household income based on your prior year income. Applications are handled through the state Department of Revenue. For more information, visit tinyurl.com/SeniorTaxDeferral.

Tax penalty waiver

Ramsey County property owners may request a waiver to avoid paying a penalty for a late property tax payment. Owners may request one penalty waiver per parcel once every 10 years.

The waiver may apply to either the first half of the year or second-half payment, not both. See the Ramsey County property tax website at tinyurl.com/RamCoTax2022.

Abatement for exceptional hardship

Property owners who have suffered a medical emergency or another exceptional hardship have the right to request a property tax abatement from the Ramsey County auditor/treasurer.

The request may apply to penalties, interest and costs. If an abatement is not granted, Property Tax Services will work with property owners to provide information on all available forms of tax relief available, including developing partial payment schedules. See the county website at tinyurl.com/RamCoTax2022.

Challenging a property assessment

Property taxes are heavily but not exclusively tied to estimated market values. The county assessor’s office works throughout the year to establish market values for every property by Jan. 2 of each year, and notices of valuation and classification are mailed shortly afterward. Those numbers will be used to help determine taxes payable the following year.

In other words, the property taxes you pay in 2023 will be based in large part on an estimated home value that was mailed to your home by early 2022.

If you feel your assessment is unfairly inflated, homeowners can challenge the county assessor’s determination of their home’s estimated market value, but the process gets more complicated the longer you wait. The first step is to call the assessor’s office at 651-266-2131 to discuss concerns.

You can then request an “open book” meeting with an assessor. Those meetings are usually held on two dates in early April. Customers can mail or provide electronic documentation (such as a recent appraisal or sale of the property) that supports their claim of overvaluation or erroneous classification.

If you still disagree with the assessor’s findings, you can request a formal review by the county assessor and then an appeal hearing before the County Board of Appeal and Equalization. Hearings are usually held around June.

An appeal of your prior year’s value can only be appealed through the Minnesota Tax Court on or before April 30 of the year the taxes are payable. More information is online at tinyurl.com/AppealValue2022.

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