Do You Qualify for Minnesota’s Homestead Tax Credit?

As a renter or property owner, it’s wise to understand the kind of Minnesota tax credits that apply to you. You may benefit from the homestead tax credit and not even realize it. Roughly only two-thirds of all homeowners that are eligible apply for tax credits; and even as a renter, you may qualify. Minnesota homeowners and renters should understand the basics of what the homestead tax credit is and if they do or do not qualify for it.

What is the Minnesota Homestead Tax Credit?

The Minnesota homestead tax credit is a refund that is based upon your household income and property taxes paid on your home in Minnesota. Some homeowners might not know that they even qualify for this credit. There are two different types of credits – the regular homestead credit refund or the special homestead credit refund.

Qualification Requirements for Both

  • Your property is classified as your homestead.
  • You have a valid social security number.
  • You have paid your property taxes or will have paid them by Aug. 15, 2019.

Qualification Requirements for Regular

  • You owned and lived in your house between Jan. 2, 2017 and Jan. 2, 2018.
  • Your household income for 2017 was less than $110,650.

Qualification Requirements for Special

  • You owned and lived in the same home between Jan. 2, 2017, and on Jan. 2, 2018.
  • Your homestead’s net property tax increased by more than 12 percent from 2017 to 2018.
  • The net property tax increase was at least $100.
  • The increase was not due to improvements you made to the property.
  • There is no income limit for the special refund, so even if you don’t qualify for the regular refund, you may qualify for the special refund.

Understanding Minnesota’s Property Tax System

Property taxes help pay for schools, streets, fire and police protection, and more. Property taxes are less susceptible to economic, income, or spending trends. There are a number of things that can have an impact on your property taxes, though.

  • Your property taxes may increase if local governments raise spending or receive less non-tax revenue.
  • Your property taxes may go down if local governments reduce spending or receive more non-tax revenue.

The value and classification of your property are used to determine your share of the levy (budget) for local governments. The estimated market value of your home does not directly affect your property tax bill, but rather the taxable market value is used to determine your share of the levy.

Determining the Taxable Market Value on Your Home

A property’s taxable market value (TMV) is its estimated market value minus any tax exemptions, deferrals, and value exclusions that apply. Many homeowners qualify for a homestead tax exemption that reduces the amount of home value that is subjected to tax.

Home Improvements Might Increase Your Refund

If your property taxes increase due to the taxable market value of your home, you might be able to file for a higher refund. A home that has a higher market value may increase the market value of the homes around it in the neighborhood, thus creating a higher property tax. Home improvements may add to the value of your home. This does not apply to the special homestead credit refund.

Ways to Increase the Value of Your Home

There are several ways you might increase the value of your home without going over your budget. Here are some ideas for home improvement options:

    • Adding more storage throughout your home. Homeowners are always looking for extra storage, so making sure your house is fully equipped is a sure-fire way to improve its value.


  • Creating an organized garage. Having a clean, organized garage space can definitely make your home more attractive. Many people use their garage as a catch-all, so having an organized space that you would be able to actually fit your vehicles in is a desirable feature.
  • Update kitchen and bathroom fixtures. A modern, aesthetically pleasing home is essential to increase the value. You don’t have to necessarily tear down your whole bathroom and start over, but by simply replacing outdated fixtures can make the space feel brand new.


Update Your Home with Harkraft

If you are wanting to update your home in order to increase its value, Harkraft can help! With over 50 years of experience and expertise, we’ll help with mudroom design, creating more storage, and modernizing outdated fixtures. Providing you with quality products and exceptional customer service, we can take your home to the next level. Contact us today to schedule an appointment.