Committee reviews property-tax credits, taxpayer refunds and senior deferral program

Sean Williams and Jared Swanson of House Research summarized property‑tax credits, refund programs administered by the state, and the senior citizens property‑tax deferral program.

Williams explained property tax credits reduce a homeowner’s final tax bill and the state reimburses local jurisdictions for credits applied. He described the school building bond agricultural credit, created in 2017, which covered about $109 million in payments in 2024 and reimburses agricultural land for a share of school building bond referendum levies (now covering up to 70% of the qualifying levy share). Swanson summarized the agricultural homestead market value credit, the second‑largest credit, which paid about $37.4 million in 2024 and generally reaches its $490 maximum for properties valued at $115,000 or more.

Williams then described state‑administered property‑tax refunds for homeowners and renters that are designed to target taxpayers whose taxes are high relative to income. For returns filed in 2022, combined refunds totaled about $774.6 million; changes in 2023 produced a one‑time bump to roughly $1.1 billion for returns filed in 2023. For 2024 filings, homeowner eligibility extended to households with income below $139,320 and a maximum refund of $3,410; renter eligibility used an assumed 17% of rent attributable to property tax, a maximum household income of $77,570 and a maximum refund of $2,720. Williams also described the “special” or additional refund, targeted at homeowners whose property tax increased more than 12% year over year; its typical cost is under $10 million but a 2023 one‑time change raised refunds to about $43 million for returns filed in 2023.

Swanson described the senior citizens property‑tax deferral program, which allows eligible homeowners age 65+ with household income at or below $96,000 and at least five years’ residence to defer a portion of their property taxes. Participants pay 3% of household income toward taxes; the State pays the remainder to local governments and places a lien on the property. Deferred amounts, about $1.7 million across roughly 400 participants in 2023, are repaid with interest when the owner leaves the program, sells the home, or when the property no longer qualifies.