Homestead is a property tax reduction program open to Minnesota Residents. The State of Minnesota encourages home ownership by providing owner-occupied properties a reduction in their property taxes. The homestead classification can reduce the taxes on a residential property up to $304 per year.
Frequently Asked Questions:
Who can receive this benefit?
What proof of ownership is required?
What are the occupancy requirements?
When do I need to apply?
What if I am moving into a house that I have owned for over a year and want to homestead the property?
What if I sell the property?
Can a relative homestead property for me?
My statement says that my taxes are non-homestead, yet I moved into the property?
What will happen if I fail to comply with the homestead laws or file a false homestead?
Why must I provide my Social Security number?
I own an apartment building; can it be homesteaded?
Can manufactured homes receive homestead exemption?
Do "Life Estates" qualify for homestead?
What about homesteading a property owned by a trust?
Are there any "special" homestead classifications?
If you own real estate property and you, or a qualifying relative occupies the property by December 1st, you may apply for homestead status. You can only homestead one residential parcel in the State of MN.
You must have a valid copy of one of these; warranty deed or recorded contract for deed, or recorded quit-claim-deed, or Torrens title certificate, etc. granting you title to the property as proof of property ownership. In order to be recognized as a valid deed, the deed must be registered with the Hennepin County Registrar of Deed, and you will get a Certificate of Real Estate Value.
You and all other owners must use the property as your main residence – or stated another way, you must live there. Temporary and token occupancy is not considered sufficient to receive a homestead classification.
If more than one person owns the property and any of the owners do not reside at the property, then the property may receive a fractional or partial homestead classification. If the property is a "Relative Co-Owners" by terms of the financing agreement status, you may be eligible for a full homestead credit.
You should file the application as soon as possible after purchasing and moving into your home. If you purchase and occupy a non-homestead property before December 1st, and apply for homestead classification by December 15th, then the homestead credit will begin in the next assessment year.
Once the homestead classification is approved, the homestead will remain on the property until the property's ownership changes, the occupancy changes or the property is sold.
What if I am moving into a house that I have owned for over a year and want to homestead the property?
Fill out sections 1 and 2 of the Homestead application and attach a note stating what year you purchased the property. You do not need to supply a copy of your deed or Certificate of Real Estate Value.
If at any time the property is sold or you change your primary residence, state law requires you to notify the Minneapolis Assessor within 30 days. If you fail to notify the Assessor within 30 days you will be required to pay the tax which is due on the property based on its correct property class, plus a penalty.
Yes, qualifying relatives may become substitute occupants for the property owner. Qualifying relatives are defined by birth, legal adoption, or marriage. The definition of "relative of the owner" includes a child, stepchild, daughter-in-law, son-in-law, parent, stepparent, parent-in-law, grandchild, grandparent, brother, brother-in-law, sister, sister-in-law, aunt, uncle, nephew or niece, step niece or step nephew, members of family farm corporations and farm partnerships.
Limitations to Relative Homesteads
- The homestead tax benefit for a property with a relative occupant cannot exceed the benefit the owner would attain as the occupant.
- Property that has been classified as seasonal residential recreational property at any time during which it has been owned by the current owner or spouse of the current owner will not be reclassified as a homestead unless it is occupied as a homestead by the owner; this is prohibition also applies to property that, in the absence of this paragraph, would have been classified as a seasonal residential recreational property at the time when the residence was constructed.
- Neither the owner nor the relative occupant may claim a property tax refund for a homesteaded property, unless the relative occupant is a partial owner of the property.
Relative homestead property residents will have to apply for a Rental License through City of Minneapolis Inspections Department, Rental License Division, 250 S. 4 th Street Rm 300, (612) 673-5856 or Rental License Application .
Your payable 2010 tax statement is based on how the property was valued and classified as of January 2, 2009. Please note; if you did not own and occupy the property by December 1, 2009 the taxes payable in 2010 will be at the non-homestead rate. If you moved into the property before December 1, 2009, you should apply for a homestead; to receive a mid-year homestead.
A very small number of properties may have property information that list conflicting homestead classification information. Some homestead or other classification database changes occur after the Proposed Tax Statements or Truth in Taxation notices were created but prior to calculation and printing of the actual 2009, payable 2010, Tax Statements which results in the tax amounts being different on the two documents. To check on the homestead status of your property you can call the City of Minneapolis 311 service agents or access this information through the City of Minneapolis website Property Information.
Falsifying a homestead is punishable by imprisonment for not more than one year or payment of a fine of not more than $3,000, or both.
If the assessor is NOT notified within 30 days that the property has been sold or is no longer being used as a primary place of residence, the homestead status will be removed and penalties will be imposed.
Under Minnesota State law, Social Security numbers must be provided before a homestead credit will be granted. Social Security numbers will be used to determine if owners or relatives of owners have been granted more than one homestead in the state. Per Minnesota state statute, you can only homestead one residential parcel in the State of MN.
Apartment buildings with four or more units and other types of properties are usually limited to receiving the homestead treatment on the percentage of occupancy in the building used exclusively by the owner.
Yes, only the owner (title holder)/occupant can apply. The required documents and a copy of the Certificate of Title must be provided.
Yes, as long as the life estate interest is shown on the deed and the holder of the life estate meets all the homestead requirements.
Most trusts can qualify for homestead. A Certificate of Trust must be completed and approved by the City of Minneapolis Assessor. Contact the City of Minneapolis, (612) 673-3000 for more information.
Yes, for people who are blind or permanently and totally disabled, Minnesota offers special homestead classifications.
- The blind person and the blind person’s spouse, per MN Statutes, section 256D.35
- A person who is permanently and totally disabled and the disabled person’s spouse as certified by a government or qualifying agency or income-providing source that the homestead occupant satisfies the disability requirements.
The 1b Disabled Homestead Classification is unlike other homesteads in that the qualification is specific to the person and the disabling condition. This differs from a conventional homestead where the classification is granted according to the use of the property. Because of this, the MN Department of Revenue recommends that the disabled classification follow the disabled individual from one property to another. Class 1b is not an exemption from property taxes; it is a reduction in taxes.
Taxpayers seeking this special homestead classification for the disabled must submit the application and other documents to the City of Minneapolis Assessors Office by October 1st to be effective for the property taxes payable in the following calendar year. For more information, contact City of Minneapolis Information at (612) 673-3000- (TDD (612)673-2157) or download Special Homestead Classification Form PE12 (pdf).
Another special program is a Market Value Exclusion on Homestead Property of Qualifying Disabled Veterans
The application for this valuation exclusion is not a substitute for a homestead application. The property must qualify for a homestead classification before being granted valuation exclusion under this program.
There are two levels of exclusion for disabled veterans.
For veterans with "70 or more percent service-connected disability" a market exclusion of $150,000 is available on homestead property. This includes veterans with a 100% disability that is not considered permanent. Veterans in this category must reapply annually with the City of Minneapolis Assessor’s Office. Form CR-DVHE70 is due by July 1st of each year to be eligible for that assessment year (the next year’s payable taxes) for the market value exclusion.
For veterans with " total (100 percent) and permanent service–connected disability", a market exclusion of $300,000 is available on homestead property. If the veteran able to verify that they are considered totally and permanently disabled by the U.S. Veterans Administration, then they must apply by July 1st using Form CR-DVHE100 to the City of Minneapolis Assessor’s Office to be eligible the reduced tax program for the next year’s payable taxes. Once approved for the market value exclusion, totally and permanently disable veterans do not need to reapply. The property will continue to qualify for market value exclusions until there is a change in ownership or use of the property. For veterans with total and permanent disability only, a surviving spouse can also continue to qualify under this provision so long as the surviving spouse owns the property and resides there, until the spouse sells, transfers, or otherwise disposes of the property.
Neither the Department of Revenue nor the City of Minneapolis Assessor’s Office is responsible for determining disability status of veterans. Applicants requiring information concerning their discharge or disability status must work with their County Veterans Service Office or the Veterans Administration to receive this information from the V.A.
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Last updated Dec. 7, 2011