Minnesota · Real Estate Property Taxes
Real Estate Property Taxes in Minnesota (2026)
Real estate property taxes are deductible when itemizing, subject to the combined SALT cap ($40,400 for most filers, $20,200 married filing separately). Minnesota has a progressive income tax with a top rate of 9.85%, so a Minnesota filer's combined marginal rate on the next dollar at $77,706 of income is about 28.8% (22% federal + 6.8% MN).
2026 savings example for Minnesota
Planning estimate for a single filer earning $77,706 (Minnesota median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; MN tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$1,440
Federal savings
$1,100
$8,265 → $7,165 · 22% bracket
MN state savings
$340
$3,761 → $3,421 · 6.8% marginal
Combined marginal rate
28.8%
≈ $288 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $40,400.
Federal × Minnesota marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The MN column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | MN marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 5.35% | 15.35% | $154 |
| 12% | $28,500 - $66,500 | 5.35% | 17.35% | $174 |
| 22% | $66,500 - $121,800 | 6.8% | 28.8% | $288 |
| 24% | $121,800 - $217,875 | 7.85% | 31.85% | $319 |
| 32% | $217,875 - $272,325 | 9.85% | 41.85% | $419 |
| 35% | $272,325 - $656,700 | 9.85% | 44.85% | $449 |
| 37% | Over $656,700 | 9.85% | 46.85% | $469 |
Eligibility & forms
Available to homeowners who itemize deductions and pay property taxes on real estate they own.
- Must itemize deductions
- Taxes must be on property you own
- Must be imposed uniformly on all properties in the jurisdiction
- Combined state/local/property tax deduction generally limited to $40,400 ($20,200 if MFS)
Federal forms: Schedule A
Minnesota filing notes
High rates make pre-tax contributions important. Use Minnesota's own 2026 standard deduction, not the federal value. Clothing is sales-tax-exempt. The $3M estate tax exemption is well below federal. K-12 education credit and property tax refund programs may matter.
Common mistakes: Exceeding the SALT cap; Deducting taxes on property not owned by you; Double-counting taxes paid through escrow; Including special assessments that increase property value.
Frequently asked questions
How much can the Real Estate Property Taxes save a Minnesota taxpayer in 2026?
In LevyIO's example, a single filer with $77,706 of income (the Minnesota median household income in our state dataset) who removes $5,000 from taxable income saves about $1,100 in 2026 federal tax (22% marginal bracket) plus about $340 in Minnesota tax (6.8% state marginal rate), roughly $1,440 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's MN bracket data, not a survey figure.
What is the Minnesota income tax rate for 2026?
Minnesota has a progressive income tax with a top rate of 9.85%. The MN standard deduction in LevyIO's dataset is $15,300 single / $30,600 married. Four 2026 brackets to 9.85%. State standard deduction $15,300 single / $30,600 MFJ. Estate tax ($3M). Clothing exempt from sales tax.
Who qualifies for the Real Estate Property Taxes in Minnesota?
Available to homeowners who itemize deductions and pay property taxes on real estate they own.. The federal rules are the same in every state; the requirements are: Must itemize deductions; Taxes must be on property you own; Must be imposed uniformly on all properties in the jurisdiction; Combined state/local/property tax deduction generally limited to $40,400 ($20,200 if MFS). Minnesota filers should confirm on the MN return whether the state follows the federal treatment.
Which forms do I file to claim the Real Estate Property Taxes?
Federal: Schedule A. Minnesota: check the Minnesota Department of Revenue instructions for the matching state schedule. Common mistakes: Exceeding the SALT cap; Deducting taxes on property not owned by you; Double-counting taxes paid through escrow; Including special assessments that increase property value.
Real Estate Property Taxes in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.