Senator Weber’s property tax relief bill gets hearing in Senate, bipartisan support

On Wednesday, Feb. 15, the Senate Taxes Committee heard a bipartisan bill authored by Senator Bill Weber (R-Luverne) to provide significant property tax relief for agricultural, business and resort properties. This legislation, SF973, is a compilation of three provisions from last year’s Property Tax Subcommittee report, which was part of the 2022 Senate tax bill, and the Tax Conference Committee agreement.

“With a historic $17.6 billion surplus, we really need to start giving this money back to the people. This legislation seeks to provide property tax relief in a time of rapidly rising property values,” said Senator Weber. “Minnesota farmers are being severely impacted by increased property values. By raising the first-tier valuation limit for agricultural homestead property to $3.5 million, we can ensure our smaller homesteads are able to keep farming at that level.”

Highlights of this proposal include:

  • Increasing the minimum and maximum thresholds for the residential homestead market value exclusion by approximately 25%
  • Setting the first-tier valuation limit for agricultural homestead property at $3.5 million for assessment year 2024
  • Modify the classification tier rates for class 1c homestead resort property:
    • The first $850,000 of market value would be Tier 1
    • The market value from $850,001 to $3.1 million would be Tier II
    • Any value over $3.1 million would be Tier III and remain subject to the state general levy

“Resorts property, especially lakefront property, continues to go up in value. And as a result, they are struggling to stay in business due to skyrocketing property taxes. Resorts are viable businesses that have significant economic impacts on their local communities and the entire state. And by adjusting the tier system for how resorts are taxed on their real property, we would be able to keep this essential business sector thriving,” Weber said.

Additionally, this legislation would make changes to the state general tax levy. This is the only real estate tax dollars that the state of Minnesota collects, and it is applied to commercial-industrial and seasonal recreational properties. To help mitigate the impact of any property tax shifts, the statewide property tax would be reduced by $35 million beginning in 2024.

SF973 was laid over for possible inclusion in a larger taxes bill that will be introduced later in session.