Homeowners Can Now Apply for $500 Off Their Property Tax Bill—See If You’re Eligible for Relief

Property taxes in North Dakota have long been a contentious issue, with many homeowners advocating for less property taxes or even none at all.

Now they can apply for up to a $500 tax relief credit, and lawmakers insist the application process will be easier than last year.

“They should be able to have their application submitted in less than two minutes,” Tax Commissioner Brian Kroshus told The North Dakota Monitor.

Who is eligible?

Anyone who owns and occupies a dwelling in North Dakota and uses it as their primary residence is eligible. There is one credit per household.

Last year, 138,000 North Dakota households—about 90% of eligible homeowners—applied for the credit.

Also, 3,500 to 4,000 families living in trust-owned homes that were “inadvertently” excluded from the credit last year can now apply.

Those living outside their home for health reasons—perhaps residing in a rehabilitation center or nursing home—are also eligible provided their residence isn’t being rented.

Owners applying for the second time should find the process easier to navigate, promised Kroshus. First-time owners will need to provide the parcel number of their home and proof of identity.

If you live in North Dakota, you can apply for the credit here.

Why homeowners are getting a credit

The $500 credit was created in 2023 as a chorus of property tax ban proponents became too loud to ignore.

But in November 2024, ballot Measure 4, which would have made North Dakota the first state in the nation without any property taxes, was roundly defeated. It’s only Alaska that has some areas with no property taxes but because the populations are so low the areas were not included in federal surveys.

Champions of the measure argued that owners can’t keep up with ever-ballooning residential taxes tied to ever-increasing home valuations.

The median tax bill in North Dakota for owner-occupied homes in 2024 was $2,455, according to Eastern Progress. The median owner-occupied home value is $246,700.

North Dakota has a 0.97% effective property tax rate on owner-occupied housing value, which ranks it 20th in the country, according to The Tax Foundation. In comparison, New Jersey is ranked #1. Illinois ranks #2, something that has been blamed for the state’s high levels of exodus.

“They paid $250,000 for their house, their valuation goes up 5% every year and five years later, all of a sudden it’s valued at $300,000,” North Dakota farmer and real estate entrepreneur Neal Messer told anti-Measure 4 blog Let’s Keep It Local. “That increase does them no good until the day they sell it.”

But without a better plan in place, even Messer was against eliminating property taxes completely due to the chilling effect it would have on essential services such as schools, police, and fire departments.

“The North Dakota proposal to eliminate property taxes does not specify what the alternative will be,” notes Realtor.com® Chief Economist Danielle Hale. “The property tax in North Dakota could stand to be reformed, but getting rid of it entirely could create bigger problems than property owners currently face.”

The revolt against property taxes in North Dakota and elsewhere

Property taxes have long been the primary funder of local government services in all states. In North Dakota’s largest city of Fargo, property taxes make up 40% of the budget, according to its mayor.

State and local governments collected about $760 billion in taxes on real and personal property in 2023—a 31% increase from 2018, according to U.S. Census Bureau data.

In fiscal year 2021, property taxes comprised 30% of total state and local tax collections in the United States, more than any other source of tax revenue, according to The Tax Foundation. The average level of property taxes paid in 2022 across the United States was $1,815.

Corporate income accounts for the lowest state and local tax revenue.

But as assessed home valuations sharply rose in the past several years, especially since 2020, so did property tax bills, causing many squeezed homeowners to rebel.

As of 2024, 19 states, including some of the most highly taxed states—such California, Florida, and New York—have assessment limits that cap how much a property’s assessed value can increase annually.

Florida, Georgia, and Colorado have also all recently passed laws with significant restrictions on property taxes.

The future of North Dakota property taxes

The proposed ban’s defeat doesn’t mean an end to the hope of no property taxes in the state.

The new Republican governor, Kelly Armstrong, has already put forth a proposal wherein the state’s taxes on oil company earnings would pick up the slack left in the wake of a residential tax ban.

The proposed plan would “eliminate property taxes for an entire class of homeowners who need that relief the most, and it would put the bulk of primary residences on a path to zero within the next decade,” he told the legislature, according to the Associated Press.