Lawmakers consider expanding North Dakota tax credit that benefits seniors

House Bill 1335 would broaden North Dakotans’ eligibility for what is called the homestead property tax credit, which reduces or eliminates property taxes on the primary residence of a North Dakotan who is at least 65 years old, or who is permanently and totally disabled.

The bill would lower the qualifying age for the credit from 65 to 62. It would also raise the annual income threshold for qualifying from $40,000 to $70,000 and increase the maximum qualifying income from $70,000 to $100,000.

The bill eliminates property taxes on the first $200,000 of market value for the primary residence of a homeowner who has an annual income of $70,000 or less. If the homeowner has between $70,000 and $100,000 in annual income, there would be no property tax on the first $100,000 of a home’s market value.

The House Finance and Taxation Committee is considering the bill.

Lowering the eligibility from 65 to 62 would “align tax policy with the age that many citizens choose to retire,” said the bill’s sponsor, Rep. Nels Christianson, R-Grand Forks.

When he was campaigning for his House seat last year, Christianson said he frequently heard comments from Grand Forks residents that they fell just outside the limits of the homestead property tax credit. Qualifying for the program would give them needed property tax relief, Christianson said.

The homestead property tax credit program funnels state funds to local governments to make up for the property tax revenue they lose to the credit. The state Tax Department estimates the bill could result in $85.3 million in state reimbursements to local governments over two years.

“After a lifetime of paying property and income taxes, retirees should not be forced to work additional years to pay a significant property tax burden,” Christianson said.