SF3173

SF3173 (Legislative Session 94 (2025-2026))

Ownership of single-family homes restriction for corporate entities

Related bill: HF2687

AI Generated Summary

Purpose of the Bill

This bill aims to address the issues related to corporate ownership of single-family homes and enhance transparency and accountability in housing through several key measures. It seeks to restrict the number of single-family homes that corporate entities can own, increase taxes on property transactions involving corporate buyers, allocate tax revenue to support affordable housing, and establish a statewide landlord database.

Main Provisions

Corporate Ownership Restrictions: The bill prohibits corporate entities, including partnerships, corporations, and real estate investment trusts, from owning 50 or more single-family homes. Various exceptions are provided, such as for government bodies, non-profits, and mortgage holders through foreclosure.
Deed Tax Rate Increase: It increases the deed tax on the sale of single-family homes to corporate owners, setting the rate at 0.5% of the net consideration. This higher tax rate applies only to transactions involving corporate buyers.
Use of Increased Tax Revenue: The bill directs 97% of the state’s portion of the increased deed tax revenue to the housing development fund. This fund will be used for the workforce and affordable homeownership development program.
Statewide Landlord Database: A new statewide database will be established for landlords to register their properties and ownership details. This database will be publicly accessible and aims to increase transparency for tenants and prospective tenants. Landlords must submit and annually update their data.

Significant Changes to Existing Law

The bill introduces a restriction on the number of single-family homes that can be owned by corporate entities, which did not exist before.
It alters the existing deed tax structure specifically for corporate transactions involving single-family homes, increasing it from 0.33% to 0.5%.
The state shall allocate a significant portion of tax revenue from corporate real estate transactions to affordable housing initiatives.
The bill mandates the creation of a landlord database, providing tenants with resources to verify landlord details and potentially face penalties for non-compliance by landlords.

Relevant Terms

corporate ownership, single-family home, real estate investment trust, deed tax, corporate entities, affordable housing, landlord database, workforce housing, housing development fund, transparency in housing.

Bill text versions

Introduction PDF file
Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
March 31, 2025	Senate	Floor	Action	Introduction and first reading
March 31, 2025	Senate	Floor	Action	Referred to	Judiciary and Public Safety

Citations

[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines 'Homestead' for purposes of this legislative bill under the established classification in section 273.13.",
      "modified": []
    },
    "citation": "273.13",
    "subdivision": "subdivision 22"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provides context for the definition of a 'land trust' exception within the bill, referencing existing laws on land trusts.",
      "modified": []
    },
    "citation": "462A.31",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Outlines enforcement authority given to the commissioner of commerce, cross-referencing existing powers and remedies established in section 45.027.",
      "modified": []
    },
    "citation": "45.027",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Additional tax details for specific types of corporate property transfers."
      ],
      "removed": [],
      "summary": "The bill amends this section regarding the determination of tax for deeds or instrument transfers.",
      "modified": [
        "Clarified tax implications for various forms of corporate-to-corporate conversions."
      ]
    },
    "citation": "287.21",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Statements on penalties for expected subsequent transfers."
      ],
      "removed": [],
      "summary": "References penalties and tax procedures related to transfer conversions.",
      "modified": []
    },
    "citation": "287.31",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Mentions the electronic transfer requirements applicable for payment procedures of deed taxes.",
      "modified": []
    },
    "citation": "270C.42",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill redirects certain tax proceeds towards a program under section 462A.38 for workforce and affordable homeownership.",
      "modified": []
    },
    "citation": "462A.38",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provides the definition of 'Landlord' within new sections proposed in the bill.",
      "modified": []
    },
    "citation": "504B.001",
    "subdivision": "subdivision 7"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provides the definition of 'Residential building' for purposes of the new statewide landlord database.",
      "modified": []
    },
    "citation": "504B.001",
    "subdivision": "subdivision 11"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines 'Tenant' in the context of the database and landlord obligations under the bill.",
      "modified": []
    },
    "citation": "504B.001",
    "subdivision": "subdivision 12"
  }
]