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HF1829 (Legislative Session 94 (2025-2026))

Property tax; tier limits modified for homestead resort properties.

Related bill: SF2076

AI Generated Summary

This bill proposes modifications to the tier limits for the classification of homestead resort properties under Minnesota’s property tax laws. Specifically, it amends Minnesota Statutes 2024, section 273.13, subdivision 22, which governs the classification and taxation of residential homesteads, including those used for seasonal and commercial purposes.

Key Changes:

  1. Class 1c Property (Resorts Used for Seasonal Residential Occupancy)

    • The tier system for property value classification is being adjusted:
      • Tier I increases from $600,000 to $1,500,000 in market value.
      • Tier II increases from $1,700,000 to $3,000,000 in market value.
      • Tier III applies to any remaining market value above Tier II.
    • Tax classification rates remain the same:
      • Tier I: 0.50%
      • Tier II: 1.0%
      • Tier III: 1.25%

  2. Qualifications for Class 1c Property

    • The property must abut public waters or a state trail and be used primarily for temporary and seasonal residential occupancy for recreational purposes (not exceeding 250 days per year for commercial purposes).
    • Includes properties where the owner (or shareholder/partner/member of an entity owning the property) uses a portion as a homestead.
    • Properties must contain at least three rental units or designated camping sites.

  3. Homestead Assessments & Declaration Requirements

    • Owners must submit a declaration by January 15 specifying the cabins or units used for fewer than 250 days in the previous year.
    • Guest registers or occupancy records may be required to verify compliance.

Purpose:

The bill primarily adjusts the tiered classification limits to potentially reduce the property tax burden on qualifying homestead resorts by allowing a greater portion of the property’s market value to be taxed at lower classification rates.

Impact:

  • Resort Owners: May benefit from reduced property taxes on a significant portion of their property’s value.
  • Tax Revenue: Potential adjustments to property tax collections could result from these reclassifications.
  • Seasonal Recreational Properties: Ensures that properties used for both personal and rental purposes maintain appropriate tax classifications.

This proposed change reflects an effort to support small and medium-sized resort owners by aligning property tax structures with market value adjustments.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 02, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
March 02, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
March 12, 2025HouseFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill modifies the classification and tier limits for property taxation of homestead resort properties.",
      "modified": [
        "Adjusts the market value ranges for tier classification of class 1c property."
      ]
    },
    "citation": "273.13",
    "subdivision": "subdivision 22"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the definition of blindness for the purpose of property classification.",
      "modified": []
    },
    "citation": "256D.35",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the definition of public water in relation to class 1c property.",
      "modified": []
    },
    "citation": "103G.005",
    "subdivision": "subdivision 15"
  }
]

Sponsors