Purpose

This bill adds a new ten-year property tax exemption for certain residential properties, aiming to reduce property taxes for long-term homeowners who have continuously lived in their home as a homestead.

What the bill would do

• Creates a ten-year homestead exemption beginning with assessment year 2027 for properties classified as class 1a or 1b.
• The exemption applies only if the property has been owned and occupied as a homestead by the same owner for at least ten continuous years prior to the year an initial application is filed, and there are no unpaid or delinquent property taxes or special assessments (including penalties and interest) due at the time of filing.
• The exemption is limited to properties in the specified classes under Minnesota law (class 1a or 1b as defined in section 273.13, subdivision 22).

Eligibility and application requirements

• Eligibility is determined by the property meeting the ten-year ownership and occupancy requirement and having no outstanding taxes or special assessments at the time of application.
• Applicants must file with the county assessor.
• The application form is to be prescribed by the commissioner of revenue and must include:
  • Name, address, and Social Security number or individual taxpayer identification number of the owner(s)
  • A copy of the current year's property tax statement for the homesteaded property
  • The initial year of ownership and occupancy as a homestead
• The county assessor must verify that the property was owned and used as a homestead by the same owner for at least ten continuous years before the initial application and that no unpaid or delinquent taxes or special assessments are due.
• The assessor may request additional information or documentation as needed to determine eligibility.

Duration and changes in ownership

• The exemption remains in effect for eligible years unless the owner sells, transfers, disposes of the property, or no longer occupies it as a homestead.
• The exemption is removed beginning with the next assessment year if any qualifying condition ends.
• The property owner must notify the assessor within 30 days if there is a change in ownership or a change in the use of the property as a permanent residence.

Administrative and implementation details

• The commissioner of revenue is responsible for prescribing the application form.
• The assessment and verification of eligibility are handled by the county assessor, who can request additional information as needed.
• The rule creates a clear interaction between the state and county levels to process and enforce the exemption.

Timeline

• Effective for assessment year 2027 and each subsequent assessment year.

Significant changes to existing law

• Establishes a new ten-year homestead exemption program that did not previously exist.
• Adds a new subdivision (10) to Minnesota Statutes 2024 section 272.02, defining the exemption and its requirements.
• Introduces explicit ownership- and occupancy-duration requirements, verification processes by assessors, and annual review conditions tied to ownership status.
• Adds obligations for property owners to report changes in ownership or use within a 30-day window.

Relevant Terms ten-year homestead exemption, homestead, assessment year 2027, class 1a, class 1b, Minnesota Statutes 272.02, subdivision 109, ownership, occupancy, ten continuous years, initial application, unpaid and delinquent property taxes, special assessments, penalties and interest, county assessor, commissioner of revenue, application, property tax statement, Social Security number, ITIN, initial year of ownership, change in ownership, permanent residence, assessors' verification, eligibility.