Market value exclusion increase sought for first time since 2008 for veterans with a disability

Veterans with a 70% disability rating receive just $1,764 monthly in compensation — a little more if they have dependents. The amount drops if the veteran is working; however, employment is less likely at that level of disability.

Providing some financial assistance is the goal of a bill sponsored by Rep. Bjorn Olson (R-Fairmont).

HF3727, as amended, would increase the valuation exclusion from $150,000 to $225,000 for veterans with a disability rating of at least 70 percent and from $300,000 to $450,000 for veterans with a total and permanent disability. Nearly 28,000 veterans in Minnesota have a 70% or higher disability rating.

Approved Wednesday by the House Veterans and Military Affairs Division, it was sent to the House Taxes Committee.

Created in 2008, the market value exclusion — reducing the market value of a home for tax purposes — has not increased since, unlike housing prices.

Rep. Bjorn Olson

“A $300,000 house in 2008, the equivalent purchasing power today is $462,268. … A $150,000 home in 2008 is currently worth $231,134,” Olson said. “The reason for this (bill) is to put us back in line to give these service members, these veterans, these disabled veterans, the ability to kind of recoup the purchasing power they would have had and to offset any of that homestead exclusion they’ve been missing, that they’ve been paying the gap for, for many, many years.”

“We’re not asking for an increase just because we’re wanting an increase; this is about getting us back in line with what that value of what that dollar was,” added Stephen Whitehead, adjutant for the Minnesota chapter of the Disabled American Veterans.

Olson shared the story of a young soldier who lost both legs and significant use of an arm after stepping on a land mine in Afghanistan.

“He said, ‘Rep. Olson, I am reminded of my service every single day. It feels to me as though the State of Minnesota has forgotten about me.’ And we have. For 18 years we have forgotten about the service of our veterans. I have not. Will we continue to forget as a Legislature about the vast services that have been rendered to these individuals who wake up every morning and are reminded of their service? I hope we don’t.”

A similar bill, HF194, was in the 2025 House omnibus tax bill, but didn’t make it into law.