Property taxes in the Peace Garden State are getting... well, expensive. If you own a home in Fargo, Bismarck, or even way out in Hettinger, you’ve probably noticed those annual statements creeping up lately. It’s frustrating. But here's the thing: North Dakota actually has a pretty robust safety net called the homestead tax credit north Dakota residents often overlook because the paperwork looks intimidating.
It’s not just for "homesteaders" in the 1800s sense.
Basically, if you are a senior citizen or someone with a permanent disability, the state wants to give you a break. They aren't going to hunt you down to give you the money, though. You have to go get it. Most people think they don't qualify because they have a bit of savings or their house is "too nice," but the income brackets changed recently, making it way easier to catch a break than it was a few years ago.
Who Really Qualifies for the Homestead Tax Credit North Dakota?
Let's get into the weeds. This isn't for everyone. If you're a 30-year-old remote worker with perfect health, this specific credit isn't your ticket to lower taxes. This is targeted.
First off, you’ve gotta be 65 or older in the year the taxes are due. Or, if you're younger, you must be "permanently and totally disabled." That sounds intense, but the North Dakota Office of State Tax Commissioner defines this through specific medical certifications or Social Security disability standards. You also have to actually live in the house. It has to be your primary residence. You can't claim this on a lake cabin in Bottineau if you live in Grand Forks most of the year.
Money matters here. Your "income" for this credit isn't just what you tell the IRS. It includes almost everything—Social Security, pensions, interest, and even dividends.
The magic number used to be lower, but current North Dakota law allows for a reduction in your home's taxable value based on a sliding scale of income. If your income is $40,000 or less, you’re looking at the maximum benefit. If you’re making $70,000, the benefit scales down. Honestly, even if you think you make a "little too much," it is worth checking the math because the deduction can still be worth hundreds, if not thousands, of dollars over time.
The Math Behind the Savings
It’s not a check in the mail.
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Instead, the homestead tax credit north Dakota program reduces the "taxable valuation" of your property. Think of it like a shield. If your home is valued at $200,000, and you qualify for a 100% credit (on the first $9,000 of taxable valuation), the county treats your home as if it's worth significantly less when they calculate your mill levy.
How the Percentages Break Down
If your income is between $0 and $40,000, you get a 100% reduction of that taxable value (up to the cap).
As you climb higher, say into the $60,000 range, that percentage might drop to 20% or 40%.
Wait, there’s a cap.
The state doesn't just wipe out the taxes on a $5 million mansion. The credit applies to a specific portion of the value. Specifically, for those in the highest bracket of need, it covers up to $9,000 of taxable valuation. In North Dakota, taxable valuation is roughly 4.5% of the "true and full value" for residential property. So, we're talking about shielding roughly $200,000 of your home's market value from taxes.
If your home is worth $150,000 and you qualify for the full credit, your property tax bill could literally drop to zero. That is life-changing for someone on a fixed income.
Don't Forget the Assets
This is the part where people get tripped up. North Dakota looks at your "net worth."
If you have $500,000 in the bank, the state assumes you can afford your taxes, even if your annual income is low. However, they are fair about what they count. They don't count the value of the home you're living in. They don't count your furniture or your car. They are looking for "liquid" assets—stocks, bonds, cash, and other real estate holdings.
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The limit for net worth is currently $500,000. If you’re under that, you’re in the clear. If you’re over, you might be out of luck for the credit, but you should still talk to your local assessor because there are other programs, like the Primary Residence Credit, which is a newer $500 flat credit that doesn't have these same strict income/asset rules.
The Application Process is a Bit Old School
You can't just click a button on a fancy app and be done with it.
You have to file an application with your local city or county assessor. Usually, this needs to happen before February 1st of the year the taxes are due. If you miss that window, it’s a massive headache to get it applied retroactively.
Bring receipts. Seriously. You’ll need:
- Proof of age (driver's license is fine).
- Your Social Security statements.
- Federal tax returns.
- Statements for any IRAs or 401ks.
- If you’re applying under the disability criteria, a written statement from a doctor or a Social Security award letter.
It feels invasive. It sorta is. But for a $1,500 or $2,000 reduction in your annual bill? It’s a few hours of paperwork well spent.
Common Mistakes People Make in ND
One big mistake is thinking this is a "one and done" thing. You have to re-apply or at least certify your income every year in many jurisdictions. Things change. You might sell some stock one year that puts you over the limit, then be eligible again the next year.
Another error? Not realizing that "income" includes your spouse's income too.
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If you are married and living together, the state looks at the household total. If you try to hide that, the auditors will find it, and they will claw back the credit with interest. It's not worth the risk. North Dakota is a small state; the tax offices talk to each other.
Also, don't confuse this with the "Renters Refund." That’s a separate program for people who don't own their homes but are 65+ or disabled. It’s similar, but it’s a direct refund check based on a portion of the rent you paid that goes toward property taxes. If you move from a house to an apartment, you switch programs.
Why This Matters for the North Dakota Economy
When seniors can stay in their homes, communities remain stable.
If property taxes force retirees to sell and move to Arizona or Florida, North Dakota loses that wealth and that volunteer base. The homestead tax credit north Dakota provides is essentially an investment in keeping long-term residents in their neighborhoods.
It’s also about fairness. A person who bought a house in 1970 for $20,000 shouldn't be taxed out of it because the market value is now $300,000 while their pension stayed the same. It’s a way to balance the scales.
Actionable Steps to Take Right Now
If you think you or a family member might qualify, don't wait until the tax bill arrives in December. That's too late to change the current year's math usually.
- Gather the docs. Find your 1040 from last year and your most recent Social Security "1099" form.
- Call the County Assessor. If you live in Cass County, call the Fargo office. In Burleigh, call Bismarck. Ask them for the "Homestead Tax Credit Application." Most will mail it to you, or you can find it on the State Tax Commissioner's website under the "Property" tab.
- Check the Net Worth. Add up your savings accounts and any non-retirement investments. If it's under $500k (excluding your house), move forward.
- File by February 1st. This is the "soft" deadline for many, but getting it in early ensures your statement is correct the first time around.
- Look into the Primary Residence Credit. Even if you don't qualify for the Homestead Credit because your income is too high, every North Dakotan who owns and lives in their home is eligible for a $500 credit as long as they apply. It’s basically free money the state set aside from the budget surplus.
Property taxes are a burden, but they don't have to be a breaking point. Taking twenty minutes to read the forms and an hour to gather your bank statements could save you enough to cover your heating bill for the entire winter. In a North Dakota January, that’s a win.