Renter’s Property Tax Refund Program

In the class we talked about the property tax incidence for apartments -- depending on the relative mobility between renting behavior and housing capital, renters and house owners each share a portion of property tax burden.

In Minnesota, the renter’s property tax refund program (sometimes called the “renters’ credit”) is a state-paid refund that provides tax relief to renters whose rent and “implicit property taxes” are high relative to their incomes. “Rent constituting property taxes” is assumed to equal 19 percent of rent paid. If that rent constituting property tax exceeds a threshold percentage of income, the refund equals a percentage of the tax over the threshold, up to a maximum amount.