ShareUnderstanding the Transition to Homestead Market Value Exclusion
The League has created and collected a variety of resources to help cities understand the homestead market value exclusion (HMVE) program and how it differs from the discontinued market value homestead credit (MVHC) program.
Understanding and adjusting
Two League documents are available to help city officials understand and adjust to these changes:
Interactive estimating tool
The League has also developed an interactive tool to help cities with this transition. The spreadsheet allows city officials to calculate estimated city and total taxes for several hypothetical properties, including homesteads and business properties, under the old MVHC reimbursement system and the HMVE system.
Educating residents
The League has produced a brochure to help cities educate their residents about the impact of the state's replacement for the market value homestead credit program. The brochure is designed to better inform residents what the transition to HMVE means for their local property taxes.
The League has also produced a PowerPoint presentation that may be used at city council meetings or town hall gatherings.
A video produced by Minnesota Public Radio News may also help cities explain the change to residents.
Additional resources
Below are more resources to help cities understand how these changes will impact them, their property tax revenues, and their residents.
- League webinar, presented live on Aug. 19
- Department of Revenue document: Understanding Recent Changes in Homestead Benefits (pdf)
- Department of Revenue overview explaining the changes (pdf)
- Department of Revenue memo on conversion (pdf)
- House Research overview of new program (pdf)
- House Research property tax simulation of effects of exclusion
- LMC article: Update on Additional Homestead Market Value Exclusion
Issues (Aug. 26, 2011) - LMC article: More Considerations for the New Homestead Market Value Exclusion (Aug. 24, 2011)
- LMC article: How Changes to MVHC Program Will Affect Cities (July 27, 2011)
Other useful resources
Your LMC Resource
Contact Gary Carlson
IGR Director
(651) 281-1255 or (800) 925-1122
gcarlson@lmc.org
Contact Rachel Walker
Manager, Policy Analysis
(651) 281-1236 or (800) 925-1122
rwalker@lmc.org
HMVE Background
As part of the 2011 omnibus tax bill (First 2011 Special Session Chapter 7), the Legislature repealed the MVHC program and created the new HMVE program. These changes are effective for taxes payable in 2012.
In place of the MVHC program, homeowners will receive an exclusion of a portion of the market value of their house from property taxes. The exclusion is computed in a manner similar to the market value homestead credit.
The impact of the change will vary from community to community, depending on a number of factors, including tax base of the community and the local tax rate.
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