During the last biennium (2005-2007), the North Dakota economy was strong, enabling the 2007 Legislature to offer $115 million in property tax relief. The relief is the result of a law passed by the 2007 Legislature and signed by Governor Hoeven. The relief is provided to homeowners, land owners, and commercial property owners.
What property is subject to property tax relief?
Three categories of property are eligible for property tax relief:
- Residential property
- Agricultural property
- Commercial property
How do I receive the property tax relief?
The method of providing the property tax relief is an income tax credit based on the property taxes that you paid for each category of property (listed in the previous question).
There are two property tax credits:
- One for residential and agricultural property.
- One for commercial property.
It is possible for a taxpayer to qualify for both credits. The credits are claimed on the 2007 and 2008 North Dakota income tax returns.
How much is the residential property tax credit?
On your 2007 income tax return, a credit equal to 10 percent of the residential property taxes shown on your 2006 real estate tax statement (or 2007 mobile home tax statement) is allowed. The amount of the credit is based on the property tax paid before any discount. Special assessments are not included when calculating the credit. The maximum credit allowed, based on your filing status, is:
- $500 if single, head of household, qualifying widow(er), or married filing separately; or
- $1,000 if you are married filing jointly.
On your 2008 income tax return, the credit is calculated in the same way as for 2007, but it is based on the residential property taxes shown on your 2007 real estate tax statement (or 2008 mobile home tax statement).
How much is the agricultural property tax credit?
The agricultural property tax credit is calculated in the same way as the residential property tax credit, except that it is based on your agricultural property located in North Dakota.
The combined amount of the residential property credit and agricultural property credit may not exceed $500 per return (or $1,000 per return, if married filing jointly).
How much is the commercial property tax credit?
The commercial property tax credit is calculated in the same way as the residential property tax credit, except that it is based on your commercial property located in North Dakota. The maximum credit allowed is $500 per return (or $1,000 per return, if married filing jointly). This credit is allowed in addition to the residential and agricultural property tax credits.
