The most commonly asked questions of homestead credit.

Q:  What is a homestead?

A: The Homestead Act of 1862 provided settlers with the opportunity to obtain land from the government. Homesteading was the vehicle by which people could obtain land from the government at a nominal fee, and then prove to the government that they could improve upon, live and survive for five years in order to gain title. Today’s homesteading is a reflection of those laws. The requirements are ownership and occupancy; the net result for homeowners is lower property taxes.

Q: Who is eligible to apply for a homestead?

A: Any homeowners purchasing a new or existing home who occupy their home as their principal residence and have not already filed for homestead. If you own a property which is the primary place of residence of a relative, that property may qualify for a homestead classification for property tax purposes. To qualify; the property must be the residence of any of the following relatives: child, stepchild, daughter-in-law, son-in-law, parent, step-parent, parent-in-law, grandchild, grandparent, brother, brother-in-law, sister, sister-in-law, aunt, uncle, niece or nephew.

Q: When should I apply for a homestead?

A: Once you have closed on your house, you should apply for homestead any time after moving into the home. Minnesota law prohibits owners from claiming homestead prior to occupancy. (Simply “closing” on your home does not constitute occupancy and does not qualify for homestead.)

Q: What is the homestead application deadline?

A: December 1is the deadline for taxes payable in the next year. New homeowners of property currently classified non-homestead are eligible to file if they did not qualify for a homestead on January 2, of the current year, but will own and occupy their property as their permanent residence on or before December 1.

Q: Where do I apply for a homestead?

A: Homeowners have two options when applying for their homestead classification:

1. Apply in person at the location provided by your real estate closer.  This is typically your city’s City Hall.

2. Obtain an application from your city’s website and mail the completed application to the Assessing Department.

Whether applying in person or filing by mail, a copy of the Warranty Deed or Contract for Deed must be provided to show proof of ownership. The application will require your signature(s) and the social security numbers of all owners who occupy your residence. State law mandates that property will be classified non-homestead if the social security numbers of all owners are not included.

Q: Do I have to file for a homestead each year?

A: No. Minnesota property tax laws provide that once the initial homestead application is filed and the property is granted the homestead status, there is no need to refile an annual homestead declaration card again, as long as the property is owned and occupied by the same party The property will remain homestead until the property is sold or no longer qualifies. State law requires that you must notify your Assessor within 30 days if you sell your property or change your primary residence.

Q: What happens if I don’t file for a homestead?

A: Failure to file for a homestead will cause the property to be classified as non-homestead, which will result in an increase in property taxes. The maximum additional non-homestead tax is $304. This amount decreases as the market value increases.

Contact your City Assessor Department for further information.