Special Homestead: Class 1b Blind/Disabled Revisited
June 2009
As a result of legislative changes, the responsibility for the filing and administration of the special homestead program was transferred from the Minnesota Department of Revenue to all county assessors in October 2008. Property owners who are requesting for the first time the classification and assessment of their property as class 1b blind/disabled homestead must now file an application with the county rather than the state. Once the county receives the application, the applicants are notified about their eligibility within four to six weeks. If their special homestead is approved, they do not have to submit another application unless there is a change in address related to a move from one property to another or because of a change in eligibility. This classification follows the qualifying person and is automatically renewed each year if the program requirements continue to be met.
What is the special homestead classification?
The special homestead classification is also known as class 1b blind/disabled homestead that provides a reduced class rate for property owned and occupied by any person qualifying as blind or as permanently and totally disabled. It differs from other homesteads or classifications that are typically based on the use of the property because the requirements are specific to the individual and the disabling condition.
Who qualifies for the special homestead classification?
Any person who is blind or permanently and totally disabled as well as a spouse who reside in either a home located on real property or a factory-built home considered personal property may qualify for the special homestead classification and receive the full benefit. In cases of joint ownership with someone other than a spouse, a partial benefit can be approved based on the fractional ownership interest. A full benefit could also be extended to property owned by a surviving spouse of a permanently and totally disabled veteran who homesteaded it for the 2007 assessment, taxes payable in 2008. If the spouse did not qualify for the special homestead classification at that time, then the 1b class cannot be granted for the current assessment and beyond. Additionally, a house that is occupied and used as a homestead by a blind or disabled relative of the property owner might qualify for the special homestead. The relative living in the house must be a qualifying blind or permanently and totally disabled person. A home that is owned by a blind/disabled person that is homesteaded by a non-blind/disabled person does not qualify for this classification. Last of all, a disabled veteran may be eligible for a special homestead if the property is not receiving the market value exclusion provided by the Disabled Veterans Homestead. If the property gets the market value exclusion, then class 1b cannot be used.
Does the special homestead classification law define “Blind” and “Disabled” for property tax administration purposes? Does the statute specify when the condition must have occurred?
Yes, the law clearly defines each condition and indicates that the blindness or disability had to take place on or before June 30th of the year the applicant is filing for the special homestead classification. If the condition occurred after this date, the application cannot be approved by the assessor until the next assessment year. For tax administration purposes, “Blind” means a person whose visual perception does not exceed 20/200 in the better eye with corrective lenses, or, if it is greater than 20/200, the condition comes with a limitation such that the widest diameter of the person’s view subtends an angle no greater than 20 degrees. The term, “Disabled”, is described as a condition which is permanent in nature and totally incapacitates a person from working at a job which produces income. The person who is permanently and totally disabled must be receiving payments from a qualifying agency (i.e. Social Security Administration, Veterans Administration, Welfare Supplemental Security, public or private pension plans, workers compensation, or an insurance program) because of the disability.
What kind of tax benefit is applied to property assessed and classified as a special homestead?
The special homestead classification is not an exemption from property taxes. It provides for a reduction in payable taxes that results in a savings of about $275.00 per year without taking into account local tax rates and other costs or savings that may affect the taxation of a property. This reduction is attributable to the first $50,000 of market value being taxed at a net class rate of 0.45 percent rather than the usual 1.00 percent rate that is used. The remaining market value has the class rate(s) used for residential or agricultural homestead property.
What happens to the special homestead classification if the property is sold, there is a change of occupancy, or a change in the marital status or condition of the qualifying person?
In each of these situations, the county assessor must be notified of the change within thirty days to determine whether or not the property continues to qualify for the special homestead. Failure to inform the assessor of the change could result in the loss of the classification plus penalties cited in M.S. 273.124, subdivision 13. Generally, the class 1b classification expires in the year that the property is sold. It also ends in the next assessment year and does not extend to the surviving spouse or relative upon the death of a qualifying person. The classification, however, can be extended to another property if the qualifying person moves and makes a new application acknowledging the change in address. When there is a change in the marital status of the qualifying person, the special homestead classification can still be applied to the property, but a new application must be completed with the updated spouse information. Should the disabling condition of the qualifying person change, the assessor ought to be advised and a new application completed so that eligibility requirements can be reviewed to determine if they are being met.
What filing requirements must be satisfied to obtain the special homestead classification?
The application must be legible and completed in its entirety. The applicant must attach all proper documentation that is requested. For a person who is legally blind, a signed and approved letter or report from a certified eye doctor giving details of the condition must be included. A statement from the applicant is not sufficient. For a person who is permanently and totally disabled, a letter from a qualifying agency stating that the individual is permanently and totally disabled and is eligible to receive disability payments is required. Copies of SSA-1099 forms, check stubs, or a physician statement are not acceptable kinds of proof. The application must also be submitted by October 1st to the Stearns County Assessor’s Office to apply for taxes payable in the next year.
How does a person apply for the special homestead classification?
To apply for the special homestead classification, a person must complete the application for Special Homestead Classification: Class 1b Property. This form may be requested by writing, e-mailing, calling, or visiting the county assessor’s office. It may also be downloaded from our Forms page. The completed application and required attachments are to be forwarded to the Stearns County Assessor’s Office at Administration Center, Room 37, 705 Courthouse Square, St. Cloud, MN 56303.