North Dakota Property Tax: How It Works
Gain clarity on North Dakota's property tax system. Learn how your tax is determined by local governments and understand your rights as a property owner.
Property tax in North Dakota is a locally administered system based on property value. These taxes fund community services such as schools, law enforcement, fire departments, road maintenance, and public parks. The process, from valuation to collection, is managed by county and local government officials, ensuring the revenue remains within the community it serves.
The Property Assessment Process
North Dakota’s property tax begins with the “True and Full Value.” For residential and commercial property, this is its market value, while for agricultural property, it is based on productivity value. Local assessors determine this value for each parcel of real estate as of February 1st each year. They analyze recent sales and a property’s specific characteristics, like new construction or remodeling, to ensure valuations are accurate.
After establishing the True and Full Value, a formula determines the “Taxable Valuation.” First, the assessed value is set at 50% of the True and Full Value. This assessed value is then multiplied by a classification ratio of 9% for residential property or 10% for commercial and agricultural property to find the final Taxable Valuation. Property owners receive an annual assessment notice stating these values and must be notified if a property’s value increases by 10% and at least $3,000 in one year.
Challenging Your Property Assessment
Property owners who disagree with their valuation can begin an appeals process by contacting the local assessor’s office. This informal discussion allows for a review of the appraisal data and any evidence the owner provides, often resolving discrepancies.
If the issue remains unresolved, the owner can file a formal appeal with the local board of equalization, which is the city or township board. If unsatisfied with the local board’s decision, the next step is to appeal to the county board of equalization.
The next level of appeal is the State Board of Equalization. An owner must have presented their case to both the local and county boards to be heard at the state level. If still unsatisfied after the state board’s decision, the owner may file for an abatement, a tax reduction request that can be appealed to the district court.
How Your Final Tax Bill is Calculated
The tax calculation uses your property’s “Taxable Valuation” and a “mill levy,” which is the tax rate set by local governments. One mill equals $1 of tax for every $1,000 of taxable value. Each local taxing entity, such as the county, city, and school district, sets its own mill levy to meet budget requirements.
The county auditor combines these individual levies into a total mill levy and calculates the final tax bill. The Taxable Valuation is divided by 1,000 and then multiplied by the total mill levy. For example, a property with a Taxable Valuation of $9,000 and a total levy of 300 mills would have a tax bill of $2,700.
Available Property Tax Relief Programs
North Dakota provides property tax relief through the Homestead Property Tax Credit and the Disabled Veterans Property Tax Credit. The Homestead Credit is for homeowners who are 65 or older or are permanently and totally disabled. To qualify, an applicant’s household income, after medical expense deductions, must not exceed $70,000. For incomes up to $40,000, the credit reduces the property’s taxable value by 100%, while incomes between $40,001 and $70,000 receive a 50% reduction, both subject to a maximum amount.
The Disabled Veterans Property Tax Credit is for veterans with a service-connected disability of 50% or more. The credit applies to the first $8,100 of taxable valuation, with the reduction percentage matching the veteran’s disability rating. An unremarried surviving spouse may also be eligible. Applications for both the Homestead and Veterans credits are available from the county director of tax equalization or the State Tax Commissioner’s office and require supporting documentation.
Paying Your North Dakota Property Tax
County treasurers mail property tax statements annually. Payments can be made in two installments without penalty: the first half is due by March 1, and the second half by October 15. Missing these deadlines results in penalties.
A 5% discount is available for property owners who pay the entire tax bill in one lump sum on or before February 15. This discount applies to general taxes but not special assessments. Payments can be made by mail, in person at the treasurer’s office, or online if the county offers it.