05.03 - 2012 Budget and Levy - Laserfiche WebLink

Home Browse Search

Why is this Change Resulting in Tax Increases? The impact of this state change will vary for each property depending on a variety of factors. However, in general, the elimination of the homestead credit and replacement with homestead exclusion is going to mean higher property taxes for the majority of property owners, even if property tax levies adopted by local governments do not increase. The bullets below explain the most significant impacts of this change: • The state is no longer providing a homestead credit and instead the entire levy is being paid by local property taxpayers. In Crow Wing County, this means a total of approximately $3.8 million in market value credits that were paid by the state to all the local governments will now be paid by property owners. • The new homestead exclusion lowers the tax base, which has led to increases in the property tax rates of most local taxing jurisdictions. A property tax rate is calculated by dividing the property tax levy by the total tax base. • For properties that are non - homestead, including seasonal recreational, commercial and industrial property, the higher property tax rates are likely to mean higher property tax bills even if their values have declined. • For properties that are homestead, the new homestead exclusion may not be enough to offset the increases in tax rates and the elimination of the homestead credit, thus many homestead properties as well will experience tax increases. • Reductions in local governments levies will help mitigate the overall property tax increase; however, the tax shift impacts of the law change are unavoidable. • Crow Wing County's 2012 preliminary levy certification is a reduction of -2.37% when compared to 2011. Want More Details and Information? Taxpayers may f nd more detailed explanations of this change by visiting the county website at www co.crow -wing minus and click on the link titled "2012 Homestead Benefit Changes" Additional Resources or Homeowners: Affected homeowners with household incomes below $100,780 or whose property taxes increase by more than 12% or $100 (whichever is greater) may apply for the state's property tax refund and, if qualified, will get some of the increase refunded. The form to apply for the state's property tax refund is the M11311, available at: http:.1Itaxes.state.mn.us/12ages/current forms.asnx Page 2 of 2