A change in how North Dakota calculates property tax discounts and credits could meaningfully reduce what you owe—if you know it's coming.
Most North Dakota property owners don't realize that the order in which tax discounts and credits are applied to their bill can change the final amount they owe. That's about to matter more, thanks to a provision buried in HB1626.
Here's what's changing: Starting with taxable years beginning after December 31, 2025, North Dakota will apply the 5% early-payment discount before subtracting the primary residence credit, rather than after. That sequencing shift has a direct dollar impact on your net property tax bill.
The math is straightforward. If you pay your property tax by February 15, you qualify for a 5% discount. You also may qualify for the primary residence credit, which reduces your taxable value. The question is: which calculation happens first?
Under the old approach, the credit would reduce your tax bill first, and then the 5% discount would apply to that smaller amount. Under HB1626's new sequencing (codified in Section 2, 57-20-09), the 5% discount applies to the gross tax bill first—the larger number—before the primary residence credit is subtracted.
The practical result: you get 5% off a bigger number, which means a larger dollar discount in your pocket.
Example: Say your gross property tax is $10,000 and your primary residence credit would reduce it by $1,000.
In this scenario, the new sequencing saves you an additional $50.
This change applies to property owners who:
If you own rental properties, commercial real estate, or mixed-use properties, understanding this change is important for budgeting and tax planning.
The new sequencing applies to taxable years beginning after December 31, 2025. That means your 2026 property tax bill will be the first to reflect this change when you pay in early 2027.
If you typically pay by the February 15 deadline to capture the discount, you should expect a slightly lower bill under the new rules—assuming you also qualify for the primary residence credit.
Mark your calendar for the 2026 tax year. If you manage multiple properties or have questions about how this sequencing applies to your specific situation, contact your county assessor's office or a property tax professional. The change is modest in most cases, but it's real money, and it's worth understanding before your next bill arrives.
For a property-management-specific summary of HB1626 and other recent North Dakota tax changes, contact your state real estate or property management association.