North Dakota vs. Minnesota Taxes for Homeowners: What Grand Forks Area Buyers Should Know
North Dakota homeowners pay a much lower state income tax than their Minnesota neighbors — ND's top rate tops out around 2.5%, compared to Minnesota's top rate of 9.85%. On the property tax side, both states tax real estate at broadly comparable effective rates, but each offers its own relief programs, so the "cheaper" side of the river depends on your income, home value, and how long you plan to stay.
For buyers weighing a home in Grand Forks, ND against one in East Grand Forks, MN, taxes are often the deciding factor. Here's how the two states stack up.
Income Tax: North Dakota's Biggest Advantage
North Dakota has one of the lowest state income tax structures in the country. Married joint filers pay a flat 1.95% on taxable income, while single filers pay 1.95% up to roughly $44,725 and 2.5% above that. Minnesota, by contrast, has a progressive income tax ranging from 5.35% up to 9.85% — one of the highest top rates in the nation.
For a household earning $100,000–$200,000 a year, that gap can mean thousands of dollars annually. A married couple with $200,000 in taxable income might owe around $3,900 in North Dakota income tax versus $12,000 or more in Minnesota. If you work in Grand Forks or on Grand Forks AFB but are deciding where to live, this is often the single biggest financial variable in the ND-vs-MN decision.
Property Taxes: Closer Than You'd Think
Property taxes are assessed locally in both states, so rates vary by city, school district, and county — but North Dakota's effective property tax rate on owner-occupied homes runs close to 0.9%–1% of value, and Grand Forks County and East Grand Forks/Polk County rates land in a similar range. Neither state has a dramatic property tax advantage on paper; the real differences show up in the credits and exemptions each state layers on top.
North Dakota's Primary Residence Credit is worth knowing about: it offers up to $1,600 off your property tax bill for homeowners who apply and occupy the home as their primary residence, with no age or income restrictions. The application window typically runs January 1 through April 1 each year through the state tax commissioner's office. North Dakota homeowners may also stack this with the Homestead Property Tax Credit or Disabled Veterans Property Tax Credit if eligible.
Minnesota takes a different approach with its Homestead Market Value Exclusion, which reduces the taxable value of an owner-occupied home, plus an income-based Property Tax Refund (sometimes called the "circuit breaker" credit) for homeowners whose property taxes are high relative to their income. That means lower- and middle-income Minnesota homeowners can see meaningful relief that isn't available to ND homeowners in the same way.
Sales Tax and the Everyday Cost Difference
Beyond income and property tax, North Dakota's state sales tax is lower than Minnesota's, and Grand Forks' local sales tax rate is generally a bit less than East Grand Forks' combined state-and-local rate. It's a smaller factor than income tax, but it adds up over years of everyday spending, especially on big-ticket purchases like vehicles and furniture.
So Which Side of the River Makes Sense for You?
If you're a higher earner, North Dakota's income tax savings alone can outweigh any property tax differences, which is why many buyers who work in Minnesota still choose to live in Grand Forks or nearby Thompson and Manvel. If your household income is modest and you'd qualify for Minnesota's property tax refund, East Grand Forks can be more competitive than the sticker-price comparison suggests. There's no universal right answer — it depends on your income, your home's assessed value, and whether you plan to apply for the credits each state offers.
Let's Run the Numbers for Your Situation
Every buyer's tax picture looks different, and the right side of the river often comes down to your specific income and homebuying budget. I work with buyers across Grand Forks ND, East Grand Forks MN, Grand Forks AFB, Thompson ND, and Manvel ND, and I'm happy to walk through how these tax differences might play out for your household as you compare neighborhoods and price ranges. As a Realtor with Crary Real Estate, I can also connect you with local lenders and tax professionals who can get you exact numbers before you decide. Contact me today, or visit https://www.soldbyleahbjur.com to get started.
Leah Bjur, REALTOR® | MRP Crary Real Estate 701-317-0439
Sources
- 2026 North Dakota Tax Rates & Rankings | Tax Foundation
- North Dakota Tax Guide 2026: Low 1.95–2.5% Income Tax, Oil Revenue & No Estate Tax
- Minnesota Tax Guide 2026: 9.85% Top Rate, Estate Tax, and the Snowbird Residency Trap
- Primary Residence Credit | North Dakota Office of State Tax Commissioner
- How to Get the ND Primary Residence Credit in 2026 | Gate City Bank
