Homeowner tax credit "should" be simpler in its second year

By: Mary Steurer

(North Dakota Monitor) - North Dakota homeowners can now apply for $500 off their 2025 property tax bill as the Office of State Tax Commissioner gears up for the second year of the primary residence credit.

Lawmakers created the program in 2023 to provide North Dakotans with across-the-board property tax relief.

About 138,000 North Dakota households applied for the subsidy in its inaugural year, which the Office of State Tax Commissioner estimated amounted to roughly 90% of eligible households.

Return applicants can expect an easier application process this time around, Tax Commissioner Brian Kroshus said. They’ll just need to submit their house number and the first four letters of their last name in the online application, and their parcel number and address will automatically come up.

“They should be able to have their application submitted in less than two minutes,” Kroshus said.

New applicants will also have to provide proof of their identity and the parcel number of their home.

The program is generally open to anyone who owns a home in North Dakota and lives there a majority of the time. Those unable to live in their homes for health reasons — like those residing in a rehabilitation center or nursing home — can also apply, as long as they’re not renting the residence out while they’re gone. The application period closes March 31.

The Office of State Tax Commissioner will work with lawmakers this session to extend the program to residents of homes held in trusts, as well, Kroshus said.

He said an estimated 3,500 to 4,000 families living in trust-owned homes were inadvertently excluded from the program in 2024. They’ll be able to receive the 2025 tax credit as well as apply to retroactively get the discount on their 2024 property tax bill, Kroshus said.

Even though the 2025-2027 state budget hasn’t been adopted, Kroshus said his office has it on good authority that the tax credit will receive funding in the legislative session that starts Tuesday.

The Legislature budgeted $100 million for the program for the 2023-2025 biennium. Kroshus said he expects there to be some money left over at the end of the fiscal year.

“That is in part just because of the timing of when the legislation was introduced, there wasn’t a lot of time to vet it from a fiscal impact standpoint,” he said. “So to err on the side of caution, the number was inflated to be safe.”

Any unused money would return to the state’s general fund, he said.

Kroshus said the Office of State Tax Commissioner will ask for a similar amount in the upcoming budget.

Since the program is bankrolled by state money, it does not affect local property tax collections.

The legislation that created the primacy residence credit requires the state to reimburse counties for property tax collections by June 30. The Office of State Tax Commissioner aims to have those payments complete by the end of February.

“The sooner we can get the dollars, the funds to the various counties, the better it is for them,” Kroshus said.

Aaron Birst, executive director of the North Dakota Association of Counties, said counties have spoken positively about their experience working with the state on the program, and that he hasn’t heard any concerns from county auditors about being paid on time.

Property tax relief and reform is expected to be a hot topic in the upcoming legislative session.

As of November, Legislative Council reported it already had dozens of requests for property-tax related bill drafts.

Birst cautioned that new property tax programs tend to be a lot of work for county auditors and the Office of State Tax Commissioner. The first year administering the primary residence credit was a big lift, he said.

”The more stability you have on tax relief programs, the better, from our perspective,” Birst said.

North Dakota voters in November defeated a measure that would have eliminated property taxes based on assessed value.

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For more information on the primary residence credit and other North Dakota tax relief programs, visit the Office of State Tax Commissioner’s website.