Minnesota boosts homestead credit to offset rising property taxes
Perham and Otter Tail County homeowners who filed a 2025 Homestead Credit Refund will get an automatic bump, but big assessment hikes can still outpace it.
Homeowners in Perham and across Otter Tail County who already filed a 2025 Homestead Credit Refund will see an automatic increase, a small but timely cushion as higher assessments keep landing on local tax bills. The Minnesota Department of Revenue said the one-time boost is nearly 15% and does not require anyone to amend a return.
The increase applies to 2025 Homestead Credit Refunds and was folded into HF2438, Minnesota’s 2026 omnibus tax bill. House Session Daily reported the increase is 14.88% and will cost the state’s General Fund $125 million. Gov. Tim Walz signed the measure in late May 2026, and Revenue Commissioner Paul Marquart said the department moved quickly because Minnesotans are feeling the impact of rising property taxes statewide.
The refund is aimed at homeowners whose property taxes are high compared with income, which makes it most helpful for residents already stretched by taxes on a homestead. For a homeowner whose refund would normally be $1,000, the increase would add about $148.80. That extra payment can soften the blow of a higher bill, but it is not enough to wipe out a major assessment jump or a sharply higher levy in one year.
That gap matters in Otter Tail County, where property owners can face a double hit when market values rise and tax bills follow. A homeowner with a substantial increase in assessed value may still owe more even after the credit adjustment, especially if the rise in taxes is larger than the 14.88% bump in the refund. The benefit helps, but it is designed as a one-time increase to the refund, not a full shield against every tax increase.
Otter Tail County says homestead application timing can affect both 2026 property taxes and eligibility for the Property Tax Refund. If a home was purchased or moved into in the past year, residents should contact the Otter Tail County Assessor’s Department in Fergus Falls, where Heather Jacobson heads the office that assesses real, personal and exempt property in the county.
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