Several proposals to provide homeowners with relief from sharply rising property taxes are floating around at the Minnesota Capitol as state lawmakers get closer to piecing together a tax bill this session.

One thing Democratic-Farmer-Labor and Republican legislators seem to agree on is that property owners need a break. But before that can happen, they’ll have to reach an agreement on just how much relief there will be and how it will be distributed.

The Senate Taxes Committee on Tuesday heard one of the DFL proposals — a little more than $100 million in one-time property tax relief for an estimated 588,000 homeowners using the homestead tax credit. The average tax refund increase would be about $171, according to a Department of Revenue estimate.

“This is a targeted, one-time increase to the property tax refund that delivers fast relief to Minnesotans feeling rising costs,” said Sen. Grant Hauschild, DFL-Hermantown. “It keeps eligibility tied to income and targets relief to middle to low-income Minnesotans whoare feeling those increases most.”

It would work through an existing tax refund, where a 2023 funding boost by the DFL-controlled state government helped more than half a million homeowners, Hauschild explained.

The bill has the support of taxes chair Sen. Ann Rest, DFL-New Hope, who held it over for inclusion in this year’s tax bill. It could end up passing in the DFL-majority Senate, though with a House tied between parties, any property tax bill will have to be a compromise between the parties.

In St. Paul, owners of median-value homes, worth around $289,000, can expect their property taxes to increase by roughly $558 in 2026 — a 13.4% increase from last year. A lot of that was driven by a referendum to a St. Paul Public Schools increase voters approved in November.

Statewide property taxes

Statewide, property owners can expect to see an overall increase of 6.8%, or $873 million more than in 2025, according to the Minnesota Department of Revenue. Minnesota’s total property tax burden for all local governments is $13.8 billion.

Changes at the federal level under the administration of President Donald Trump add another potential cost driver with new eligibility requirements for assistance programs like Medicaid, according to the Association of Minnesota Counties.

Costs like staffing, employee benefits, capital costs and even gas prices are all up, according to the group. But unpredictability and new rules from higher levels of government might mean new staffing needs and expenses for counties in the future.

Unfunded mandates have also driven costs. In Ramsey County, the biggest drivers of expenses were unfunded mandates from the state of Minnesota, employee compensation and “directing resources to our core services and improving our organizational performance,” County Manager Ling Becker said last year.

GOP calls for larger tax relief

House Republicans have advocated for a significantly larger tax relief bill that calls for $4 billion in one-time funding. About 1.6 million homeowners would qualify for the refund and would receive $2,500 if all applied, according to the Minnesota Department of Revenue.

DFLers said they were concerned that such significant one-time spending would hurt the state budget in the future. Bill sponsor Rep. Greg Davids, R-Preston, who co-chairs the House Taxes Committee, told members last week that while he took a “go big or go home” approach with the initial $4 billion proposed, the final amount could be adjusted.

“What about the holes in people’s budgets? Are we thinking the government has to solve everything?” he said. “We’re going big. Will this fit? We’ll see. I want to get it on the table and have the discussion.”

Rep. Athena Hollins, DFL-St. Paul, said she wanted to see an approach to addressing affordability that focused on people most in need of help, expressing concern that such a large amount of property tax relief to a broad segment of homeowners would mean less funds for other programs

“I really see this as not just an issue of wealth, but also an equity issue because the people in my community are far and away renters … I have one of the lowest income districts in the state of Minnesota,” she said. “We need to figure out a way to help ease the pain for the people of Minnesota who really need that use, not somebody who would just benefit from a few extra dollars in their pocket.”

Capping property taxes

Some Republicans want more than just rebates to address continued growth in property taxes. State Sen. Michael Kreun, R-Blaine, has introduced a bill that would cap property taxes at the rate of inflation and require voters to approve taxes above that level. It hasn’t gotten a hearing in the DFL-majority Senate.

“I guess you could say the property tax rebate is better than nothing, but it is still insufficient,” he said at a news conference on April 15, tax day. “Minnesotans need permanent, ongoing property tax relief. That’s where our focus should be.”

Kreun also was skeptical of DFL and Republican proposals to create a “task force” on property taxes, arguing that it was avoiding action while pretending to find a solution.

There’s a month left of the legislative session, and lawmakers technically don’t have to do anything this year. The state has a $3.7 billion surplus according to the most recent budget forecast, and a $377 million projected surplus in the 2028-2029 biennium.

Any proposal on property taxes that reaches the finish line will have to be a product of compromise between the tied House, DFL-majority Senate and DFL governor.

Gov. Tim Walz said he discussed property tax proposals with legislative leaders on Tuesday, though he didn’t say which ideas might have a chance of moving forward.

The governor said he agreed with property tax relief overall, but that the proposals were better suited for a year when the Legislature is working on its next budget.

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