Disabled veterans could see property tax exclusion benefit increase 10 percent

The House Veterans Affairs Division approved a measure Monday that would increase a property tax benefit for certain disabled veterans and their families.

Since 2008, a program in Minnesota has allowed disabled veterans to receive a market value exclusion – a property tax break – on their homesteads. As amended, HF1123 would increase the annual maximum exclusion amount for veterans with a 100 percent permanent and total disability rating from $300,000 to $330,000 and increase the benefit from $150,000 to $165,000 for 70 percent or higher disability-rating veterans.

“We’ve done a number of things [for veterans] in the Legislature over the years,” Rep. Jim Davnie (DFL-Mpls), the bill’s sponsor, said. “What we haven’t done is touch the exclusion amount.”

The bill next heads to the House Taxes Committee. It has no Senate companion.

Qualified disabled veterans can subtract the exclusion amount from the value of their homestead, as calculated by the assessor, before property taxes. In some cases, homes can be entirely exempt. A 2014 paper published by the nonpartisan House Research Department states that other taxpayers shoulder the cost of the benefit.

“There’s a great deal of instances of support” for the bill from veterans and veterans’ organizations, Phillip Tennebaum, a Korean War Army veteran, told the committee. “Home prices have increased but the deductible amount has not changed in many years.”