Updated September 5, 2026. Quick answer: Minnesota’s deferral caps what you actually pay at 3% of household income and defers the rest, charges up to 5% interest, and its lien priority is date-based: any mortgage recorded before the deferral notice stays ahead of it, and only later liens fall behind.
What Minnesota’s deferral requires
Minnesota’s Senior Citizens’ Property Tax Deferral Program, Minn. Stat. chapter 290B, requires at least one homeowner to be 65 or older, or 62 if their spouse is the other owner, with household income at or below $96,000, at least five years of homestead ownership and occupancy, and existing mortgage or lien debt no more than 75% of the home’s assessed market value. The mechanism is distinctive: rather than deferring a flat dollar figure, the program sets an annual maximum property tax of 3% of household income, and the state covers whatever the actual bill exceeds that cap.
A capped interest rate, and lien priority decided by recording date
Interest is set by the state’s general §270C.40 formula, a floating rate tied to the average prime rate that the Commissioner redetermines every January 1, but §290B.07 caps it at 5% regardless of what that formula would otherwise produce; the general rate has actually published at 8% for 2025 and 7% for 2026, both above the cap, so the deferral program’s real rate has been 5% throughout. On lien priority, Minnesota draws a clean, date-based line: any lien, including a mortgage, recorded before the deferral notice is filed keeps its priority over the deferral lien, while anything recorded after the notice falls behind it. A pre-existing mortgage is therefore always senior in Minnesota; only later encumbrances are at risk.
When it comes due, and how to apply
The deferred balance falls due when the property is sold or transferred, when all qualifying homeowners have died, when a homeowner voluntarily notifies the commissioner in writing to end the deferral, or when the property stops qualifying as a homestead. Repayment is due within 90 days for a sale or death, and within one year for a voluntary termination or a homestead disqualification. Applications are due on or before November 1, for deferral of the following year’s property taxes.
Minnesota’s broader senior property-tax picture, covering exemptions, freezes and circuit-breaker credits, not just the deferral: property tax breaks for seniors in Minnesota.
How every state’s programme compares: property tax relief for seniors by state. What a deferral means in general, and who it catches out: the property-tax deferral lien trap.
Statutory text read at each state’s own legislature, revisor, or revenue agency this session. General information, not tax or legal advice; rates, caps and thresholds change most years and a county or state agency retains the final say on your own application.