Property Tax Updates in North Dakota

Tax Professionals' Resource
February 28, 2013 — 1,313 views  
Become a Bronze Member for monthly eNewsletter, articles, and white papers.

Every state including North Dakota has its local mill rate. When the taxable value of the real estate, that is land and buildings, is multiplied by the local mill rate of North Dakota, we get the North Dakota property tax. North Dakota might have emerged as the first state to eliminate the local property taxes, if the voters had not rejected a recent move to eliminate this tax. In recent years, the issue of raising property tax has been hotly debated in many states of the nation after local governments attempted to raise additional revenue through this measure.

Who Pays Property Taxes in North Dakota

All property unless exempted is subject to property tax. Everyone, whether it’s an individual or a business, pays property taxes in North Dakota. While January 1 is the due date to pay property tax assessed for the last year, which can be paid until March 1 without penalty, a 5 percent discount accrues to the taxes paid in full by February 15. A mobile home/business is also subject to property tax under certain conditions. Centrally assessed property including railroads, pipelines, and utilities are also subject to the tax at the same rate and time as the locally assessed property.

Tax Rates in North Dakota

You need to know the taxable value of the property and the local mill rate so as to multiply these figures and determine North Dakota property tax rate. You get to know the true or full value of commercial property on the basis of assessment made by the local assessor. Multiply this figure by 50 percent and you get the assessed value. The taxable value is ten percent of the assessed value. Finally, the local mill rate multiplied by the taxable value is what you need to pay as tax. A 5 percent discount on consolidated tax is given if paid by February 15. A cumulative penalty ranging from 2 percent to 12 percent on both real estate and mobile home accrues beginning March, which continues to rise.  

Property Tax Relief

The North Dakota property tax relief packages over the last three sessions have cost roughly $732 million to the state. The last relief program that was adopted in 2009 has saved taxpayers between 15 and 19 percent on property tax. However, according to the administration, tax payers don’t see the savings in print. The lawmakers are trying to change it this year. The relief started in 2007 with income tax credit worth 10 percent. The bill could help save $550 for an individual and $1000 for a married couple. Over $90 million was the estimated cost of the state from this relief program.

In the 2013-2015 budget, the school district levies have been further reduced. So a total of over $700 million accrues to taxpayers. The property tax was set to fall even steeper but city and the county taxes increased, so the overall property tax advantage was diminished.   

Bill to Cap Property Valuation Also Presented

A recent House Bill 1239 is designed to cap property valuation at 3 percent. This cap aims to help not only fixed income old homeowners but others who find rising valuations and tax bills difficult to cope up with. However, capping the taxable valuation of property was questioned by the local officials. There were concerns over diminishing services associated with the cap.

Tax Professionals' Resource