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HF178 (Legislative Session 94 (2025-2026))

Refundable construction tax exemption provided for construction of new multifamily residential housing for first-time homebuyers.

Related bill: SF2178

AI Generated Summary

Summary of HF178 First Engrossment (Minnesota House of Representatives, 94th Session):

This bill proposes an amendment to Minnesota's taxation statutes to provide a refundable sales and use tax exemption on construction materials, supplies, and equipment used for building new multifamily residential housing (limited to duplexes and triplexes) for first-time homebuyers.

Key Provisions:

  • Tax Exemption Scope:

    • Applies only to the first $165,000 of materials, supplies, and equipment costs.
    • The exemption is initially paid at the time of purchase but later refunded.

  • Eligibility Criteria:

    1. After construction completion, the owner must be a first-time homebuyer and occupant of at least one unit in the home.
    2. The purchase agreement must reflect that the tax exemption savings were used to reduce the home's purchase price.

  • Refund Process:

    • Tax is initially collected as usual and refunded upon proof that the criteria were met.
    • Proof must be submitted in a manner prescribed by the Commissioner of Revenue.

  • Expiration Date:

    • The exemption expires on July 1, 2033.
    • Refunds cannot be issued after June 30, 2033.

Purpose:

This bill is intended to reduce new housing costs for first-time homebuyers by making construction materials tax-exempt, thereby encouraging affordable homeownership in smaller multifamily housing developments.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 09, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
February 09, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
February 09, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
February 19, 2025HouseFloorActionMotion to recall and re-refer, motion prevailedHousing Finance and Policy
February 19, 2025HouseFloorActionMotion to recall and re-refer, motion prevailedHousing Finance and Policy
February 19, 2025HouseFloorActionMotion to recall and re-refer, motion prevailedHousing Finance and Policy
February 26, 2025HouseFloorActionCommittee report, to adopt as amended and re-refer toTaxes
February 26, 2025HouseFloorActionCommittee report, to adopt as amended and re-refer toTaxes
February 26, 2025HouseFloorActionCommittee report, to adopt as amended and re-refer toTaxes
March 16, 2025HouseFloorActionAuthor added
March 16, 2025HouseFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "A provision to detail how taxes should be imposed and collected before refund."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill references taxing rates applicable under section 297A.62.",
      "modified": [
        ""
      ]
    },
    "citation": "297A.62",
    "subdivision": "subdivisions 1 and 1a"
  },
  {
    "analysis": {
      "added": [
        "A clarification on the refund provisions for qualified recipients of tax exemptions under the conditions specified."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill references the refund process for taxes as provided in section 297A.75.",
      "modified": [
        ""
      ]
    },
    "citation": "297A.75",
    "subdivision": "subdivisions 1, 2"
  }
]

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