As tax season approaches it is important to be informed about changes in the law. It is even more important to know about changes that will help you reduce your tax burden.  Case in point: A property tax credit called the Primary Residence Credit (PRC).

What Is Property Tax?

Ownership of real property and/or a home requires payment of property tax. This property tax funds taxpayer services. For instance, in the city of Fargo, ND, property taxes fund the city government, public school districts, county government, Fargo Parks and Recreation, Cass County Soil Conservation District, Regional Water Resource District, and the State of North Dakota.

It is very important to pay the tax on time. Tax is due the first day of January following the year for which the taxes were levied, with a deadline of February 15 to receive a discount and a hard deadline of March 1. Property tax must be paid to avoid penalties and interest, a tax lien, or the inability to have a county recorder record and file a quit claim or warranty deed to transfer ownership of property.

New Legislation

During the 2023 Legislative Session, members passed the Primary Residence Credit under House Bill 1158. This amends and reenacts subsection 1 of section 57-02-08.1 of the North Dakota Century Code statute, General Property Assessment. The PRC is big news for homeowners!

Breaking Down The Law

Adding an entirely new section to N.D.C.C. § 57-02-08.1, the PRC lists eight specific qualifications to be eligible for the tax credit. A synopsis is as follows:

1. An individual is entitled to a credit of $500 against the property tax due on the individual’s primary residence. The credit may not exceed the amount of property tax due. The credit must be applied after other credits have been applied.
2. The term “Primary Residence” includes a dwelling in this state. An individual may not have more than one primary residence.
3. The credit applies even if one does not reside in the homestead because they are confined to the nursing home, hospital, or other care facility as long as the homestead is not rented.
4. Only one credit can be applied per household.
5. The individual is not eligible if the individual’s residence is a farm structure already exempt from taxation.
6. The credit may not reduce liability for special assessments levied upon any property.
7. The application is due April 1 of each year
8. The tax commissioner shall create and maintain the necessary forms and provide them to the public upon request.

Other interesting characteristics of the PRC are that it has no income limitations or age restrictions, and it applies to the upcoming tax year.

How Do I Get The Tax Break?

The credit is not automatic. An online application option is available. The Office of the State Tax Commissioner started accepting PRC applications on January 1, 2024 with a deadline of March 31, 2024.

We Can Help

Now that you are aware of this new opportunity for North Dakota homeowners to save money on property taxes, it’s important to assess whether you qualify and to act within the given timelines. This article is for informational purposes only. If you have questions about real estate law, SW&L Attorneys is here to help. For related articles on real estate, check out our blog.