Property tax in North Dakota represents the highest property tax amounts in the upper Midwest. Learning what these taxes entail and how they are calculated can help you make informed choices about the county in which you decide to live. North Dakota property taxes are calculated on Jan. 1 of every year and must be paid by March 1. As an ad valorem tax, property tax is based on the current market value of the property as decided by an annual mass appraisal by local appraisers and on sales data and other factors local to the area of the appraisal.

Average North Dakota Property Taxes

The assessed value of all effective real estate taxes in North Dakota is only equal to 50% of the market value of the property. Residential property taxes are then calculated on just 9% of that 50% market value. The median home value in North Dakota, according to WalletHub’s 2016 Property Taxes by State report, is $142,000. Therefore, the taxable property value of the median home is just $6,390. Each county or city establishes a mill rate for taxation purposes. This mill rate is $1 per $1,000 of taxable value and is set by the taxing authority. For example, the City of Grand Forks, North Dakota, as of May 2016, had a mill rate of 343.08 mills. This rate translates to an effective tax rate of 1.29% for residential properties in the city.

As mill rates can be confusing, it is easier to express taxation rates as the effective property tax rate in a percentage of the total market value of the home. One study places North Dakota at 1.22%, while another study has the state’s effective tax rate at 1.34%. The latest results from the Tax Foundation, as of 2015, which used the tax percentage of owner-occupied median home value rankings, placed North Dakota at 1.11%. The difference in these figures is represented between the average effective tax rates across all property in a state in comparison to just the assessed residential home values. The low figure of 1.22% applies only to residential properties, while the high figure of 1.22% or 1.34% is representative of all property in the state, including commercial and industrial. In North Dakota, homeowners receive a considerable break on property taxes.

Residents of Cass County, home to the city of Fargo and the state's largest population, pay the highest effective tax rate in North Dakota at 1.74%. The median Cass County property tax bill of $2,758 is also the state's highest. Slope County pays the least in residential property taxes at just $250 annually at a 0.41% tax rate, which is also the lowest property tax rate in the state. Slope is the least populous county in North Dakota and the 20th-least populous in the nation.

How North Dakota Compares to the National Average

WalletHub’s study places North Dakota as the 16th-most expensive state in the country, while SmartAsset lists it as the 17th most expensive. The latest results from the Tax Foundation as of 2015 placed North Dakota 21st. SmartAsset lists North Dakota’s total effective property tax rate at 1.34%, compared to a national average of 1.11%. Residential taxes are on par with the national average, while business and industrial landholders pay higher than the national average.

How North Dakota Compares to Neighboring States

North Dakota only has three neighboring states: Minnesota, South Dakota and Montana. According to SmartAsset’s current tax information, Minnesota has a residential tax rate of 1.19%, South Dakota's rate is higher at 1.356% and Montana's rate is the lowest at 0.87%.

Property taxes in North Dakota tend to favor lower rates for residential property and slightly higher for commercial or industrial property. Residential property is in line with the national average, yet for commercial property, it is higher than the national average.

South Dakota Property Tax Guide

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