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HF1488 (Legislative Session 94 (2025-2026))

Property tax; requirements for class 4d(1) low-income rental housing modified.

Related bill: SF33

AI Generated Summary

This Minnesota bill, H.F. No. 1488, seeks to modify requirements for class 4d1 low-income rental housing under state property tax law. It makes the following key changes:

  1. Eligibility Criteria for 4d1 Classification:

    • At least 20% of units in a rental housing property must meet affordability requirements.
    • Eligible units include those that:
      • Receive federal Section 8 assistance.
      • Are part of a low-income housing project receiving federal tax credits.
      • Are financed by the USDA Rural Housing Service and receive rental assistance.
      • Receive government financial assistance (federal, state, or local) with recorded rent and income restrictions.

  2. Income & Rent Restrictions:

    • Assisted units must be occupied by tenants with income not exceeding 60% of the greater of area or state median income (adjusted for family size), based on HUD calculations.
    • Rent for these units cannot exceed 30% of this income threshold.

  3. Use of Property Tax Savings:

    • Owners of 4d1-classified properties must use the property tax savings for:
      • Property maintenance
      • Property security
      • Improvements to the property
      • Rent stabilization
      • Contributions to the property's replacement reserve account.
    • Owners must annually reapply and certify to the Minnesota Housing Finance Agency that the tax savings were used for these approved purposes.

  4. Compliance Requirement:

    • Properties classified under 4d1 in the prior year must demonstrate compliance with the rule on using tax savings to maintain the classification.

The bill aims to ensure affordable housing tax benefits directly contribute to property improvement and rent stability for low-income tenants.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 23, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
February 23, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "New requirements for property tax savings usage."
      ],
      "removed": [],
      "summary": "The bill modifies property taxation requirements for low-income rental housing under section 273.128.",
      "modified": [
        "Adjusts criteria for property classification eligibility."
      ]
    },
    "citation": "273.128",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References property classification under section 273.13.",
      "modified": []
    },
    "citation": "273.13",
    "subdivision": "subdivision 25"
  }
]

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