ST. PAUL, MN – State Representative Melissa Hortman (DFL – Brooklyn Park) is co-authoring a bill to restore the Homestead Credit for Minnesota homeowners.
Last session, the majority party in the legislature eliminated this credit, which benefited 95 percent of homeowners in Minnesota. All versions of the majority’s tax bills starting in March eliminated the credit and after a prolonged government shutdown, the provision became law in the final budget agreement.
The Homestead Credit reduces property taxes by as much as $304 a year for homes valued below $414,000. The credit will be eliminated next year and the property tax increase will be reflected on the Truth-in-Taxation statements that go out this fall.
“This credit reduced property taxes for homeowners — it is unfortunate that it was eliminated," said Rep. Hortman. “Raising property taxes is the worst way to raise revenue to close the state's budget gap. Families who have lost income due to the recession cannot afford increased property taxes.”
The majority replaced the Homestead Credit with a complicated, non-transparent program called the Homestead Market Value Exclusion. This program excludes part of the value of some homes from their assessments, but the overall impact on the average homeowner is a tax increase.
“The Homestead Credit was common-sense tax relief for Minnesotans,” Rep. Hortman said. “I will work with my colleagues on both sides of the aisle to restore it.”