By Jared Swanson, jared.swanson@house.mn
Senior Citizens Property
Tax Deferral Program
October 2023
What is the Senior Citizens Property Tax Deferral Program?
The Senior Citizens Property Tax Deferral Program allows property taxpayers who are 65 years or older,
and whose total household income is $96,000 or less, to defer a portion of their homestead property
taxes until some later time. It provides senior citizens whose property taxes are high relative to their
incomes, but who wish to stay in their homes, an option for paying their property taxes.
How does it work?
Regardless of how high the tax is on the homestead, the taxpayer initially pays an amount equal to 3
percent of the total preceding year’s household income. The state pays any amount over 3 percent,
called the “deferred tax,” to the county in which the home is located. A lien attaches to the property.
The deferred tax is a loan. Interest on the loan is calculated at the same rate as unpaid state taxes—a
floating rate that cannot exceed 5 percent. Before the owner can transfer the title of the property, the
deferred tax plus interest must be repaid.
For example, John and Mary Jones own a home; its total property tax is $1,400. They have a total
household income of $30,000. Under this program, they must pay $900 in tax (3 percent of $30,000);
the remaining $500 ($1,400 minus $900) is deferred.
Who qualifies?
In order to qualify for the program, all of the following criteria must be met:
The property must be owned and occupied as a homestead by a person at least 65 years old (If
married, one spouse must be at least 65 years old and the other must be at least 62 years old)
Total household income must be $96,000 or less for the calendar year preceding the year of the
initial application
The home must have been owned and occupied as the homestead of at least one of the
homeowners for at least five years before the initial application
There must be no state or federal tax liens or judgment liens on the property
The total unpaid balances of debts secured by mortgages and other liens on the property do not
exceed 75 percent of the assessor’s estimated market value of the property for the current year.
Debts and liens include deferred tax and interest under the program, unpaid and delinquent
special assessments and property taxes, and associated penalties and interest. Current year
property taxes and Property Assessed Clean Energy liens are not included in the total.
What information is the applicant required to provide?
An applicant must provide, at their own expense, a report detailing any mortgages, liens, judgments, or
unpaid property taxes on the property. For “Abstract” properties, the report is an owners and
encumbrances report that is prepared by a licensed abstracter. For “Torrens” properties, the report is a
current certificate of title that is available from the county recorder. If owners are unsure which type of
property they have, they may find out from the county recorder.
Senior Citizens Property Tax Deferral Program
Does the taxpayer need to annually reapply?
No, once a taxpayer is enrolled in the program, annual applications are not required. However, if
household income exceeds $96,000 in any calendar year, the owner must notify the Department of
Revenue, and no further property taxes may be deferred. However, the owners will remain enrolled in
the program, and once their income falls below the $96,000 threshold again, they may notify the state
and request that the deferral be resumed.
Can the taxpayer still file for refunds?
Yes, a taxpayer is still allowed to file for the property tax refund and any other property rebates that the
state offers. However, no direct cash payments will be made to the taxpayer. Rather, the amount of the
refund will be applied to the total amount of the deferred property tax on the taxpayer’s home. The
property tax refund is calculated on the full tax amount.
When does it terminate?
The deferral terminates when any one of the following events occurs:
the property is sold or transferred
all qualifying homeowners die
the homeowner notifies the Commissioner of Revenue, in writing, of intent to withdraw from
the program
the property no longer qualifies as a homestead
How many people participate in the program?
In calendar year 2021, the program had 375 active participants with $1.74 million in taxes deferred.
Where does a taxpayer apply for the program?
Applications are available in the county auditor’s office or from the Department of Revenue’s website at
www.revenue.state.mn.us/property-tax-deferral-senior-citizens.
Minnesota House Research Department provides nonpartisan legislative, legal, and
information services to the Minnesota House of Representatives. This document
can be made available in alternative formats.
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