If you’re 65, you’ve lived in your house for at least five years, and your household brings in $96,000 or less, the State of Minnesota will pay part of your property taxes for you. You pay 3 percent of your income. The state pays the rest to the county and books it as a loan. The interest rate is capped at 5 percent. In 2026 the Department of Revenue’s own interest rate on unpaid tax is 7 percent.
The Department of Revenue counted 457 senior homesteads in the program in 2024. Statewide. In the same analysis, citing Social Security Administration figures, it put about 87 percent of senior homeowners under $96,000 in income.
So almost nobody uses it. Some of that is sensible. It’s a loan with a lien, and people should be careful about those. Some of it is timing: the rules loosened a lot in 2023, and a family that got a no before then has no reason to ask again. And the program has a few traps that can knock you out, or make the whole loan due within 90 days, that nobody mentions until they bite.
How does Minnesota’s senior property tax deferral work?
The program lives in chapter 290B, and the Legislature put its name in the statute: the “senior citizens’ property tax deferral program.” Minn. Stat. § 290B.02. It’s been on the books since 1997.
The math is one sentence. The Department sets your “annual maximum property tax amount” at “three percent of the homeowner’s total household income for the year preceding either the initial application or the resumption of eligibility certification, whichever is applicable.” § 290B.05, subd. 1. Every year after that, the county auditor takes your total property taxes and special assessments, subtracts your 3 percent number, and the difference, up to a ceiling I’ll get to, is the “deferred property tax amount.” § 290B.05, subd. 3. The state pays that difference to the county by August 31. § 290B.09, subd. 1. The statute then says what that payment is: it “is deemed a loan from the state to the program participant.” § 290B.07(a).
Here’s a made-up example. Household income of $40,000. Your 3 percent number is $1,200. Your tax bill, assessments included, is $4,800. You pay $1,200 and the state lends you $3,600.
Now notice which year’s income sets the number. It’s the year before you first applied. Your taxes can go up every year after that, and your share doesn’t move. The increase goes into the loan. There’s one exception: tax on “new improvements made to the property after the initial application has been approved” gets excluded from the deferral. § 290B.05, subd. 3. Build a three-season porch and you pay the tax on the porch yourself.
And you don’t reapply. Once you’re in, you stay in until something terminates the deferral. But nothing gets deferred in a year you stop meeting the conditions below, income cap included.
Who qualifies? The 2023 rules, not the ones you heard about.
All six of these have to be true. I’ve kept the statute’s order.
- You own the house and live in it as your homestead, and you’re 65 or older. If you’re married, one spouse has to be at least 65 “at the time the first property tax deferral is granted,” and “the other spouse must be at least 62 years of age”. § 290B.03, subd. 1(1).
- Total household income for the calendar year before you first apply “may not exceed $96,000”. § 290B.03, subd. 1(2). That’s household income as the property-tax-refund chapter defines it. The Department’s application tells you to use the number on line 7 of your Form M1PR.
- The house has been the homestead of at least one of you “for at least five years prior to the year the initial application is filed”. § 290B.03, subd. 1(3).
- “[T]here are no state or federal tax liens or judgment liens on the homesteaded property”. § 290B.03, subd. 1(4).
- No mortgage or other lien on the property secures future advances, “except for those subject to credit limits that result in compliance with clause (6)”. § 290B.03, subd. 1(5).
- Everything secured against the house, including delinquent taxes and special assessments but not the current year’s taxes or a residential PACE lien, “does not exceed 75 percent of the assessor’s estimated market value for the year.” § 290B.03, subd. 1(6).
The qualifying homestead is the house plus the land reasonably needed to use it as a home, “but not to exceed one acre.” § 290B.03, subd. 2. A condo or a unit in a multi-unit building can qualify.
Clauses (2) and (3) are where the Legislature quietly opened the door. Before 2023 the income cap was $60,000 and you had to have lived in the house for 15 years. The 2023 omnibus tax bill struck “$60,000” and wrote in “$96,000”, struck “15” and wrote in “five”, and made both changes “effective for applications for deferral of taxes payable in 2024 and thereafter.” 2023 Minn. Laws ch. 64, art. 3, §§ 26–29. The governor signed it May 24, 2023.
That’s a 60 percent jump in the income cap and a residency requirement cut by two-thirds. If somebody looked into this program for a parent in 2020 and got told no, the answer may be different now. Enrollment moved, a little. House Research counted 375 active participants in calendar year 2021. The Department counted 457 homesteads receiving a deferral in 2024. Different counters and different units, but the same story: a few hundred households, when the Department’s own analysis puts nearly nine in ten senior homeowners under the income cap.
A 2025 bill, H.F. 2086 / S.F. 2504, would have raised the cap again to $110,000 and cut the residency requirement to two years. The 2026 Minnesota Statutes still say $96,000 and five.
Your estate plan can disqualify you
This is the part I’d want every estate planner to read, because the people most likely to need this program are the same people who’ve been told they need to do something with the house.
A life estate deed knocks you out. The statute’s definition of a qualifying homestead ends with this sentence:
Property is not qualifying homestead property if a person or entity other than the applicant or the applicant’s spouse holds an interest in the property as the vendor under a contract for deed or as a remainderperson.
— Minn. Stat. § 290B.03, subd. 2
Deed the house to your kids and keep a life estate, and your kids are remainderpersons. You’re out. The Department’s own qualification list puts it bluntly: you can’t have “a reverse mortgage, a life estate, any state or federal tax liens, or judgment liens on your property.”
So does a reverse mortgage. The statute doesn’t use those words. Clause (5) bars liens that secure future advances, and a reverse mortgage is built on future advances. The Department lists a reverse mortgage as disqualifying, on its website and on the application.
A home equity line isn’t automatically fatal. It secures future advances too, but clause (5) lets one in if its credit limit keeps you under the 75 percent line in clause (6).
A transfer-on-death deed, as I read it, doesn’t disqualify you. Minnesota’s TOD deed statute says that until the deed takes effect at your death, “it has no effect on title to the real property described in the deed”. Minn. Stat. § 507.071, subd. 2. Your beneficiary isn’t a remainderperson. He’s nobody, title-wise, until you die. I explained how those deeds actually work at /news/minnesota-transfer-on-death-deed/.
A transfer into your own trust after you enroll is the one I’d ask about first. The deferral terminates when “the property is sold or transferred”. § 290B.08, subd. 1(a)(1). Chapter 290B has no exception for a deed into your own revocable trust. On the words of the statute, that’s a transfer, and a transfer starts a 90-day repayment clock. If you’re enrolled and someone hands you a trust deed to sign, get the Department’s answer in writing before you record it. The trust side of the homestead question, and the assessor application that keeps the homestead classification, is at /news/put-your-house-in-a-trust/.
What does the loan actually cost?
Interest runs at the rate the Department charges on unpaid tax under § 270C.40, subdivision 5, “but not to exceed five percent”. § 290B.07(a). That base rate is the average prime rate for the six months ending September 30, rounded to the nearest full percent, set by October 15 and effective the next January 1. § 270C.40, subd. 5. The Department announced that “[t]he interest rate for 2026 is 7%.” So in 2026, the cap is the rate. Interest on each year’s deferral starts “September 1 of the payable year for which the taxes are deferred.” § 290B.07(a).
Here’s what else you’re signing up for.
A lien, recorded. The Department records a notice of qualification with the county recorder or registrar of titles, and the notice “must state that it serves as a notice of lien and that it includes deferrals under this section for future years.” § 290B.04, subd. 2. It’s a property-tax lien. Mortgages recorded before the notice stay ahead of it. Anything recorded after it falls behind it. And the deferral for a year twenty years from now carries the same priority as the first year’s. § 290B.07(a). You pay the recording fee, but not until the lien is satisfied. § 290B.04, subd. 2.
Your refund checks. You can still claim the homestead credit refund and the special refund, and both are computed on your full tax, deferred part included. § 290B.06. But you won’t see the money until the loan’s paid off. Refunds get applied “first as a deduction from the amount of the deferred tax for that year, and second as a deduction against any outstanding deferral from previous years, rather than as a cash payment.” Id. The Department lists what it grabs: your income tax refund, your property tax refund, your political contribution refund, and lottery winnings over $600.
Your privacy, a little. The application has to warn you that your annual deferred amount, the cumulative deferral, and the interest on the county’s yearly notice are public data. § 290B.04, subd. 1(a). Your household income stays private. Id., subd. 1(b).
A ceiling. Total deferred taxes and interest, plus whatever your mortgages and other liens were at the time you applied, “may not exceed 75 percent of the assessor’s current estimated market value of the property.” § 290B.05, subd. 4. If property values flatten and the loan keeps growing, you can hit the line. The state doesn’t lend past it, and the rest of the bill comes back to you.
A penalty if you go quiet. If your household income goes over $96,000 in a year, you have to tell the Department in writing by July 1 of the following year. § 290B.04, subd. 3. Miss it and the penalty is 20 percent of the taxes improperly deferred, or 50 percent if you “knowingly failed to file”. § 290B.04, subd. 5(a). When your income drops back to $96,000 or less, you can resume. § 290B.04, subd. 4.
When does the loan come due, and who pays it?
The deferral terminates on any one of four events: the property “is sold or transferred”; “the death of all qualifying homeowners”; you tell the Department in writing you want out; or the property “no longer qualifies as a homestead.” § 290B.08, subd. 1(a). A year in which the formula produces no deferral doesn’t terminate anything. Id., subd. 1(b).
Then the clock starts:
| What ended it | When the whole balance is due |
|---|---|
| Sale or transfer; death of all qualifying homeowners | Within 90 days |
| You opt out in writing; the house stops being a homestead | Within one year |
§ 290B.08, subd. 2. Pay inside the window and “[n]o additional interest is due on the deferral”. Id. The county then records a notice of termination, and the lien is discharged. Id.
Ninety days after the last owner dies is a short fuse. Getting a personal representative appointed, the house listed, and a sale closed inside that window is tight. The Department’s own FAQ answers the question this way: “The lien will stay on your home and your estate must repay the loan within 90 days.”
And if nobody pays? The statute doesn’t send a collection letter. It says “the penalty, interest, lien, forfeiture, and other rules for the collection of ad valorem property taxes apply.” § 290B.08, subd. 2. The unpaid deferral gets treated like unpaid property tax, and unpaid property tax in Minnesota can end in tax forfeiture. If the house forfeits, the county cancels the deferral lien, but when it later sells the property the proceeds go first to the county’s costs of the sale and then “to reimburse the state for the amount of the canceled lien.” § 290B.07(b). What happens to anything left over is a separate fight, and I wrote about it at /news/pung-tax-forfeiture-surplus-after-tyler/.
The heir with a TOD deed doesn’t dodge any of this. The beneficiary takes the house “subject to all effective conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges, judgments, tax liens, and any other matters or encumbrances” that sat on it the day the owner died. § 507.071, subd. 3. The deferral lien comes with the house.
It isn’t waiting in line with the unsecured creditors, either. When an estate can’t pay everybody, the personal representative pays claims in a statutory order, and I walked through it at /news/minnesota-insolvent-estate-claim-priority/. But this is a recorded tax lien on the house itself. Medical Assistance estate recovery is a separate claim with its own rules, and a house can carry both; that’s at /news/minnesota-medical-assistance-estate-recovery/.
None of that makes the program a bad deal. It makes it a loan against the house, which is exactly what it says it is. The family needs to know the number exists. The county auditor sends the owner a statement of the year’s deferral and the cumulative balance with interest every year by July 1. § 290B.04, subd. 6. Put that letter where your kids will find it.
How do you apply, and when is it due?
“Applications are due on or before November 1 for deferral of any of the following year’s property taxes.” § 290B.04, subd. 1(a). For taxes payable in 2027, that’s November 1, 2026, which is a Sunday. Don’t leave it for the weekend. Miss it, and the next window is November 1, 2027, for taxes payable in 2028.
You can apply in the year you turn 65, but “no deferral of property taxes will be made until the calendar year after the taxpayer becomes 65 years old.” Id. The Department approves qualifying applications and notifies you on or before December 1. Id., subd. 2.
The paper form is Form CR-SCD, Property Tax Deferral Application for Senior Citizens, and the Department also takes applications online. You’ll attach this year’s property tax statement and a property report: for Torrens property, a copy of the current certificate of title, and for abstract property, an owners and encumbrances report from a licensed abstracter. Either one “must be dated within 30 days of your application.” So don’t order the title report in September and mail the application at Halloween. The statute lets the Department make you pay for that report yourself. § 290B.04, subd. 1(b).
One more thing the approval does: if you have delinquent taxes or special assessments when you get in, the Department pays those off to the county too, and they go into the loan. § 290B.04, subd. 7.
What people confuse it with
Minnesota has several property-tax breaks for homeowners, and none of them is this one.
The homestead credit refund is the income-based refund you claim on Form M1PR. Deferral participants keep it, but it pays down the loan. § 290B.06.
The special refund is in § 290A.04, subdivision 2h, which calls it an “additional refund”. If you owned and lived in the same homestead on January 2 of both years, and your gross property tax went up more than 12 percent and by at least $100, you can claim 60 percent of the increase above the greater of 12 percent or $100, up to $1,000.
The homestead market value exclusion takes 40 percent off the market value of a homestead worth $95,000 or less before the tax is computed, phasing out to nothing at $517,200. § 273.13, subd. 35(b).
The disabled veterans’ exclusion takes $150,000 off the market value of the homestead of an honorably discharged veteran rated 70 percent or more, and $300,000 for a total and permanent disability. § 273.13, subd. 34(a)–(b). You apply to the assessor by December 31 of the first assessment year you want it. Id., subd. 34(h).
And if your real problem is that the county valued the house too high, deferral doesn’t fix that. A tax appeal does, and the petition is due in April, not November. That’s at /news/minnesota-property-tax-appeal-278/.
Minnesota will lend you your property taxes at 5 percent, secured by a house you already own. In 2024, 457 households said yes.
Madgett Law, LLC
Madgett Law, LLC handles estate planning for Minnesota homeowners, including transfer-on-death deeds, revocable trusts and the deeds that fund them, and the homestead rules that come along when the house is the biggest thing you own. If a parent is enrolled in the deferral program, or you’re weighing it against a TOD deed or a trust, read about our trusts and estate planning practice, then send us a message.
Sources: Minn. Stat. § 290B.02 (program name); § 290B.03, subd. 1(1)–(6) (qualifications: age 65, spouse 62; $96,000 household income; five years; no tax or judgment liens; no future-advance liens except within credit limits; 75 percent of estimated market value), subd. 2 (qualifying homestead; one acre; contract-for-deed vendor or remainderperson disqualifies); § 290B.04, subd. 1(a) (November 1 deadline; application in year turning 65; public-data statement), subd. 1(b) (property report at applicant’s cost; household income private), subd. 2 (approval by December 1; recorded notice of lien), subd. 3 (excess-income certification by July 1), subd. 4 (resumption), subd. 5(a) (20 and 50 percent penalties), subd. 6 (annual notice by July 1), subd. 7 (payment of delinquent taxes and assessments); § 290B.05, subd. 1 (annual maximum property tax amount equals three percent of household income), subd. 3 (deferred property tax amount; new improvements excluded), subd. 4 (75 percent limit on deferred taxes and interest plus liens at application); § 290B.06 (refunds computed on full tax; refunds offset deferral); § 290B.07(a) (deferral is a loan; interest per § 270C.40, subd. 5, not to exceed five percent; accrual from September 1; lien priority), (b) (forfeiture; reimbursement of the state from sale proceeds); § 290B.08, subd. 1(a)–(b) (termination events), subd. 2 (payment within 90 days or one year; no additional interest if timely; discharge; property-tax collection rules if unpaid); § 290B.09, subd. 1 (state payment to county by August 31); Minn. Stat. § 270C.40, subd. 5 (annual interest rate); 2023 Minn. Laws ch. 64, art. 3, §§ 26–29 (raising the income limit from $60,000 to $96,000 and cutting the residency requirement from 15 years to five, effective for applications for deferral of taxes payable in 2024 and thereafter; signed May 24, 2023); Minn. Stat. § 507.071, subd. 2 (TOD deed has no effect on title until effective), subd. 3 (beneficiary takes subject to liens and tax liens); Minn. Stat. § 290A.04, subd. 2h (additional refund); Minn. Stat. § 273.13, subd. 34(a)–(b), (h) (disabled veterans’ market value exclusion; application by December 31), subd. 35(b) (homestead market value exclusion); Minn. Stat. § 278.01, subd. 1(c) (petition filed on or before April 30); Minnesota Department of Revenue, “Property Tax Deferral for Senior Citizens” and “Property Tax Deferral for Senior Citizens FAQ” (last updated Oct. 15, 2026); Minnesota Department of Revenue, Form CR-SCD, Property Tax Deferral Application for Senior Citizens (Rev. 3/26); Minnesota Department of Revenue, “Tax Professional Tip #14 – Income Tax Penalties and Interest Rates” (Apr. 2, 2026); Minnesota Department of Revenue, Analysis of H.F. 2086 / S.F. 2504 (Mar. 19, 2025) (457 senior homesteads receiving a deferral in 2024; about 87 percent of senior homeowners with incomes under $96,000); Minnesota House Research Department, “Senior Citizens Property Tax Deferral Program” (Oct. 2023) (375 active participants in calendar year 2021). This article is general information about Minnesota law, not legal advice. Reading it does not create an attorney–client relationship, and no outcome is promised or implied.