Minnesota’s Legislature passed a tax relief package that sets aside $125 million for property tax rebates to homeowners. It’s a one-time payment, not an automatic credit. Approximately 600,000 households that meet the state’s Revenue Department requirements will qualify.
The bill cleared the House by a vote of 126-8 and the Senate 52-15 during the final hours of the 2026 legislative session, which ended on May 18. The governor signed the tax refunds bill as part of a larger package that also included funding for struggling hospitals and county IT upgrades.
Minnesota OKs $125M in property tax rebates
The credit amounts to $173 per household. To be eligible, your 2025 household income must be below $142,490. You also must have lived in and owned your primary home on January 2, 2026, and the property must be classified as a homestead with your county.
This is not automatic. Every homeowner must file Form M1PR with Minnesota’s Department of Revenue. The usual deadline is August 15, but for the 2025 cycle, it has been extended to August 17, 2026 (since August 15 falls on a Saturday). There is an additional year to file if you miss that date.
Two types of refunds under the same program
The Homestead Credit Refund program has two components that can be combined:
- Regular refund — Based on your income level and the amount of property taxes you paid.
- Special refund — No income limit. This applies if your net property tax increased by more than 12% between 2025 and 2026, as long as the increase is over $100 and not due to improvements you made to the property.
The special refund is capped at $1,000. You can qualify for both refunds at the same time, which could push your total benefit above the $173 base credit.
How to apply for the special tax refund
You can file Form M1PR online through the Revenue Department’s free system, using compatible tax software, or on paper. Filing online is strongly recommended — it speeds up processing and you’ll receive your refund faster.
Scott Schulte, Anoka County Board Chair, emphasized the importance of the measure: “It’s going to make a difference — that’s part of somebody’s paycheck.” He noted that Anoka County, one of the state’s most working-class counties, has a large number of qualifying households.
Background on the legislative deal
The final agreement is much smaller than the original Republican proposal, which called for a one-time $4 billion refund averaging $2,500 per household for 1.6 million homeowners. Democrats rejected that plan, arguing it would harm the state’s General Fund too severely.
The approved version maintains the homestead credit mechanism but allocates $125 million, to be distributed among the approximately 600,000 eligible households.
The entire legislative package results in a net reduction of the General Fund by $24.1 million — $40.3 million in aid and tax credits, offset by $16.2 million in additional revenue.
