New property tax credit to fully cover taxes for about 50K households, state official says

Roughly 50,000 North Dakota households will pay no property tax in 2025 because of the relief and reform bill passed during the recent legislative session, according to a Wednesday presentation given to lawmakers by state Tax Commissioner Brian Kroshus.

Kroshus told the Legislature’s Tax Reform and Relief Advisory Committee that the 50,000 households represent about 30% of those using the Primary Residence Tax Credit. Roughly speaking, the relief fully covers the property tax for homes valued at $150,000 or less.

The credit was created during the 2023 legislative session and originally offered a $500 maximum credit toward North Dakotans’ primary residence if they applied. It is is funded through Legacy Fund dollars. The Legacy Fund is the state’s oil tax savings account.

During this year’s legislative session House Bill 1176, sponsored by Rep. Mike Nathe, R-Bismarck, and championed by Gov. Kelly Armstrong, increased the maximum credit offered to $1,600, along with other property tax changes such as capping the amount political subdivisions can raise property tax levies year-over-year to 3%. The $1,600 credit is applicable for 2025.

Nathe said he was “extremely excited” to see how many people had their property tax obligation significantly reduced or outright eliminated.

”It shows that we came up with a good plan. We worked it hard,” Nathe said. “We just wanted to make sure that we gave the relief that people were asking, and I think we hit the mark with that property tax plan.”

Nathe said he was excited to see his own property tax statement when it comes out in December.

”I’m waiting anxiously to see,” he told the Tribune. “It should be good.”

At least 145,200 North Dakotans applied for the credit in 2025, marking an increase of 10,365 people from 2024. This translates into a 95% participation rate for eligible primary residences in the state.

Kroshus told the committee that the increase in applications was driven by two things: roughly 2,500-3,000 new homes that were built and are eligible for the credit, and increased awareness of the program in its second year.

He cautioned the committee that because of new home building costs and because of inflation, if the credit amount stays at $1,600, the percentage of eligible homes that have all of their property tax obligations covered by the credit will decrease going forward.