Relative Homesteads
June 2004
One of the more common forms of property tax relief in Minnesota is the state paid market value tax credit. It is applied to the property taxes levied against a homestead. Residential real estate that is owned and occupied by its owner is a residential homestead. Agricultural land that is owner-occupied is classified as an agricultural homestead. During the decade of the 1990's, each of these property tax classifications were expanded to include qualifying relatives so that property tax relief could be further extended to certain taxpayers. As a result of this change, a property that has a qualifying relative of the owner occupying it as a primary place of residence can be classified as either a residential or agricultural relative homestead if certain ownership and occupancy requirements are met. The homestead treatment extended to a property that is designated as a relative homestead is the same that would be provided if the related owner occupied it.
Who is eligible to receive a relative homestead classification?
Certain relatives who occupy the property of a related owner are eligible to receive a relative homestead. To receive a residential relative homestead, a qualifying relative is defined as a parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship may be by blood or through marriage. The owner of a residential relative homestead does not have to be a Minnesota resident, but the occupying relative has to be a Minnesota resident. An agricultural relative homestead, on the other hand, has a different definition of a qualifying relative. This person must be a child, grandchild, or parent of the owner or the child or grandchild of the spouse of the owner. Both the owner and the qualifying relative of an agricultural property must be a Minnesota resident to become eligible for the agricultural relative homestead.
Are there any ownership and occupancy requirements that must be met to obtain the relative homestead classification?
All homestead requirements are prescribed by the state. To qualify for a relative homestead, a qualifying relative of the owner must occupy the property on January 2nd of the assessment year for a full homestead, or on December 1st of the assessment year for a mid-year homestead. It must be noted that property classified as seasonal recreational residential property at any time during which the current owner or the spouse of the current owner has owned it cannot be reclassified as a residential relative homestead. In regards to the agricultural relative homestead, the owner of the agricultural property cannot be receiving the homestead treatment on any other agricultural property in Minnesota. The homestead law specifically limits each family to one agricultural homestead, while there are no limits on the number of residential homesteads that a family can obtain.
Are there any restrictions or loss of benefits for receiving a relative homestead?
Both the related occupant and owner of the property cannot claim a property tax refund for a homestead occupied by a relative. However, if the property is jointly owned and one of the joint owners occupies the property as a homestead, then the owner occupant can file for the property tax refund.
How does a person apply for the relative homestead classification?
A qualifying relative along with the owner of the property must complete a relative homestead application and submit it to the county assessor in a timely manner. This form may be requested by writing, e-mailing, calling, or visiting the county assessor's office. It may be downloaded from the Stearns County Assessor's Office Forms page.
Does a new relative homestead application have to be filed each year? What if a different relative occupies the property?
After the initial application, the qualifying relative occupant and owner are not required to file a new application each year. The assessor may, at any time, request a new application to verify the homestead status of a property. Furthermore, the homestead law requires the owner to inform the assessor's office within thirty days if the property is no longer used for homestead purposes or if a different relative occupies the property. The new relative occupant and owner are then required to file a relative homestead application.