Homestead exclusion tax clarified - KTTC Rochester, Austin, Mason City News, Weather and Sports

Homestead exclusion tax clarified

ROCHESTER, Minn. (KTTC) --  If you are a homeowner in the state of Minnesota you may be wondering why your property taxes are on the rise.  It's all part of a new homestead exclusion plan that's leaving many people confused.

Tuesday, a concerned citizens group in Spring Grove had a meeting in hopes for some clarification of why their property taxes are increasing more than anticipated.

"What happens this year," explain Spring Grove Mayor Saundra Solum, "our tax base moves down but our budget (doesn't). So now with this homestead exclusion, there's a gap there that everyone has to make up."

There would be a sliver left over, and that's where the state of Minnesota would step in and pay for it.  But under the tax exemption plan, the state of Minnesota is no longer going to be paying for it.  And they also do not want to be hurting the small homeowner.  So they gave them a tax exemption on their house, lowering the value as well as the mid-size house. So instead of the total of 800-thousand dollars, the now, new tax value will be $750-thousand dollars. Leaving a 50-thousand dollar gap in the budget, making a larger sliver. And now the state is still not going to be paying for it.

"It's probably effecting the small towns more because you don't have the businesses you pick up the slack or you don't have the multi-million dollar homes to pick up the slack," said Solum.

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