9.1. SR 09-06-2011 - Laserfiche WebLink

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MINNESOTA• REVENUE 2011 Law Change: A New Homestead Market Value Exclusion replaces the Homestead Market Value Credit The 2011 Legislature repealed the homestead residential Market Value Credit (the agricultural credit did not change), and enacted a similarly designed homestead Market Value Exclusion. This change is effective for taxes payable in 2012. The following synopsis is intended to help local governments understand this law change. Expiring law: The Homestead Residential Market Value Credit • Homesteads received a credit on their tax statements reducing their gross tax. • As shown in the chart below, the credit equaled 0.4% of the first $76,000 in market value. It was reduced by 0.09% of the market value over $76,000 until it hit $0 at $413,800 of market value. $350 $304 at $76,000 _ _ ._.___ ~ ~_ ___..._.......~. __~..~........_ $300 ----~.__ _ __~~____ ~~" $250 $200 ` "" ~° $150 v $100 $50 . __..._ ~ _~..~._..~....~_.___ __..._ _~.___.~._.......... ~.~_____....__ _~ _~.....~~_ _..._$413 800 $- a1~ 'sue '~~ 1 0 ~ 1~ Op OO OO O '`~.j ~ ~j s~ `90 ~cP OO 00 .00 O O O 'J`am ~ J"~ ~iP Q ~6' Q Q~ ~O ~cP 00 00 00 00 00 O O O O O Market Value • The state reimbursed local governments for the sum of the market value credits granted to individual taxpayers on tax statements. As a result, some of the local governments' levy came from the state as credit reimbursement payments, and some from property tax payments. • When the state cut its reimbursement payments, local governments had to budget for a gap between their levy and what they received. Local governments may have levied more, cut some spending or both. New Law: The Homestead Market Value Exclusion • A portion of homestead market value will be excluded from taxation. • As shown in the chart on the next page, the exclusion equals 40% of the first $76,000 in market value. It is reduced by 9% of the market value over $76,000 until it hits $0 at $413,800 of market value.