Law directs Legacy Fund earnings and limits property tax collections

The state treasurer allocates money from the Legacy Fund earnings. The distribution comes from the Legacy Fund and goes to state funds for debt payments, roads, and property tax relief. The first allocation is the lesser of $102.624 million or the amount appropriated for debt service payments for a biennium. Of the remainder, 30 percent goes to the highway fund and the rest goes to the Legacy Property Tax Relief Fund. The law sets aside up to $408.9 million from that relief fund for primary residence credits during the 2025–27 biennium. The state treasurer distributes the money each July in odd-numbered years. The stated credit funding covers July 1, 2025, through June 30, 2027.

Taxing districts generally may not raise their property tax collections beyond a set limit without voter approval. The limit applies to political subdivisions that can levy property taxes, including cities, counties, townships, and school districts, subject to listed exceptions. The limit is generally the greater of the district's highest levy in the prior three years or its adjusted prior-year levy, increased by 3 percent. Exceptions include certain new levy authority, debt payments, and specified school district levies. Voters may approve a higher levy for four taxable years at a time. Most districts must hold the vote at a statewide general election; township voters may decide at an annual township meeting. The limit applies to taxable years beginning after December 31, 2024. Voter approval generally starts with the taxable year after the election; township approval starts in the year of its annual meeting.

Eligible property owners may claim a credit for a primary residence and apply to have it classified as primary residential property. The credit applies to an eligible taxpayer's primary residence. Owners seeking the primary residential property classification must apply; farm residences exempt from property tax do not qualify for the credit. The credit is limited to $1,600, cannot exceed the property tax due, and does not cover special assessments. Only one credit may apply to a residence, and a person may have only one primary residence. Applicants must provide a verified statement of eligibility. An owner who is away in a nursing home, hospital, or other care facility may still qualify while confined if the part of the home they occupied is not rented to someone else. The credit provisions apply to taxable years beginning after December 31, 2024. The classification and certification provisions apply to taxable years beginning after December 31, 2025.

Taxing districts provide owners with information about property values and budget hearings. Assessment notices concern taxable property assessed by an assessor or board. Budget hearing notices cover parcels with estimated property taxes of at least $100. Assessment notices show current and prior property values and local board hearing details; they must be delivered at least 15 days before the local board meeting. Owners of parcels with estimated property taxes of at least $100 receive budget hearing notices that include proposed levy information and a chance to comment. Notices may be delivered in person, by mail, or by email if the owner agreed to receive it that way and receipt is verified. The budget hearing notice is due by August 31 each year. Assessment notices must arrive at least 15 days before the local board meeting.