HomeMy WebLinkAbout7A - Property Tax Relief Programs
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16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
NOVEMBER 20, 2006
7A
Ralph Teschner, Finance Director
PRESENTATION ON AVAILABLE PROPERTY TAX RELIEF PROGRAMS
Introduction
The purpose of this agenda item is to provide the general public and
specifically senior citizens information regarding property tax relief, the criteria
necessary to qualify for these programs and contact information.
Historv
During the Council meeting of October 16th, the City Council directed Staff to
research what could be done with respect to mitigating property tax increases
for senior citizens. Also, the Council was interested in what other measures
were available to the general public in terms of general property tax relief.
Current Circumstances
Staff contacted both the Scott County Auditor's Office and the Minnesota
Department of Revenue with respect to property tax relief programs. Both
agencies identified the following three programs that offer either a direct
refund or deferment of property taxes;
1. Regular Property Tax Refund
This is commonly referred to as the "property tax circuit breaker". The 2006
eligibility requirements are:
. Maximum household income of $87,780.00
. Maximum refund of $1,640.00
. Simple worksheet completion (9 steps)
. Application is on Minnesota property tax refund form M1 PR
It appears that this program would provide the greatest potential refund for
most qualifying property owners.
2. Special Property Tax Refund
This property tax refund is for people who own and reside in their home on
both January 2, 2005 and January 2, 2006 with the following eligibility
requirements;
. No income restrictions
. Property tax increase must exceed 12%
· Refund is 60% of the increase above 12%
. Maximum refund of $1 ,000
. Application is on Minnesota property tax refund form M1 PR
This program provides the greatest potential refund for higher income property
owners.
3. Senior Citizen Property Tax Deferral Program
The Senior Citizen Property Tax Deferral Program was established to help
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245
ISSUES:
senior citizens who have difficulty paying their property taxes. To qualify for
this program all of the following qualifications must be met;
· Property owners must be 65 years of age or older
· Property must be homesteaded
· Maximum household income of $60,000
· Property must be owned and occupied for the last 15 years
· Property taxes are limited to 3% of household income
· Application is made by contacting the State of Minnesota at
651.556.6088
While the first two programs consist of a refund the senior program allows
eligible senior citizens to postpone paying - or defer - a portion of their
homestead property taxes. Senior citizens that elect to participate will only
have to pay a tax equal to 3 percent of their net income. The remaining tax will
be paid as a low interest loan by the State of Minnesota. The unpaid tax plus
interest becomes a lien on the property which must be satisfied upon sale of
the property.
Since this issue constitutes one of public awareness and communication of the
various property tax relief measures that are available it seems appropriate
that the City could post a summary with contact information with respect to
each of these property tax programs on the City's web site. Also on the back of
the property tax statements there is a box which gives notice to senior citizens
of the property tax deferral program.
For more information citizens may obtain the Minnesota Property Tax Refund
instruction booklet available on the Minnesota Revenue website:
www.taxes.state.mn.us or call the department's 24-hour forms order service at
651.296.4444.
RECOMMENDED
MOTION:
No action required
,Circuit Breaker Property Tax Refund
- ~aximum ~louse~lo~_L income $87,780
- 3ased u?on ~)ro-)erty taxes as % of income
- ~aximum refund o.~$~_,6L.O.OO
- V7 innesota tax form ~ 1 ,~
Helpful Hints
- City of Prior La.ce we Jsite:
www.cityofprior..a.(e.com
- Minnesota Revenue website:
www.taxes.state.mn.us
- Minnesota Revenue 2L. ~10ur order '")_lone:
651.296.L.L.L. ... -~V1~._PR form~
- ~
- Senior app..ication forms:
65 ~ .556.6088
Special Property Tax Refund
- No income restrictions
- ~ax increase must exceec :_2%
- ~efund == to 60% of increase a Jove :_2%
- ~aximum re=tlnd of $ ~ ,000.00
- Y~innesota tax form \1 ~_ J~
Senior Citizen Property Tax Deferral
- }roJerty owners must - Je 65 years of age
- ~ro)erty must - Jelomesteaded
- ~roJerty must -Je owned for .ast 15 years
- \1aximum _louse~lo~d income of $60,000
- ~axes ~imited to 3% Of.louse_lo..d income
- ~emainder ]aid )y State of Vjnnesota