Minnesota Legislature
SF 2055
as introduced - 89th Legislature (2015 - 2016) Posted on 04/14/2015 08:27am
Current Version - as introduced
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A bill for an act
relating to taxation; property; authorizing valuation exclusion for certain
improvements to residential and apartment property; amending Minnesota
Statutes 2014, section 273.11, subdivision 16, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 273.11, subdivision 16, is amended to read:
Subd. 16.
Valuation exclusion for certain improvementsnew text begin ; residential propertynew text end .
(a) Improvements to deleted text begin homesteaddeleted text end property deleted text begin made before January 2, 2003,deleted text end new text begin classified as
residential homestead or residential nonhomestead under section 273.13, new text end shall be fully or
partially excluded from the value of the property for assessment purposes provided that
(1) the deleted text begin housedeleted text end new text begin residencenew text end is at least deleted text begin 45deleted text end new text begin 30 new text end years old at the time of the improvement and (2)
the assessor's estimated market value of the deleted text begin housedeleted text end new text begin propertynew text end on January 2 of the current
year is equal to or less than $400,000.
(b) deleted text begin For purposes of determining this eligibility, "house" means land and buildings.
deleted text end
deleted text begin (c)deleted text end The age of a residence is the number of years since the original year of its
construction. In the case of a residence that is relocated, the relocation must be from a
location within the state and the only improvements eligible for exclusion under this
subdivision are (1) those for which building permits were issued to the deleted text begin homeownerdeleted text end new text begin
property ownernew text end after the residence was relocated to its present site, and (2) those
undertaken during or after the year the residence is initially occupied deleted text begin by the homeownerdeleted text end ,
excluding any market value increase relating to basic improvements that are necessary to
install the residence on its foundation and connect it to utilities at its present site. In the
case of an owner-occupied duplex or triplex, the improvement is eligible regardless of
which portion of the property was improved.
deleted text begin (d)deleted text end new text begin (c)new text end If the property lies in a jurisdiction which is subject to a building permit
process, a building permit must have been issued prior to commencement of the
improvement. The improvements for a single project or in any one year must add at least
$5,000 to the value of the property to be eligible for exclusion under this subdivision.
Only improvements to the new text begin residential new text end structure deleted text begin which is the residence of the qualifying
homesteaderdeleted text end or construction of or improvements to no more than one two-car garage per
residence qualify for the provisions of this subdivision. deleted text begin If an improvement was begun
between January 2, 1992, and January 2, 1993, any value added from that improvement
for the January 1994 and subsequent assessments shall qualify for exclusion under this
subdivision provided that a building permit was obtained for the improvement between
January 2, 1992, and January 2, 1993.deleted text end Whenever a building permit is issued for property
currently classified as new text begin residential new text end homesteadnew text begin or residential nonhomesteadnew text end , the issuing
jurisdiction shall notify the property owner of the possibility of valuation exclusion under
this subdivision. The assessor shall require an application, including documentation of the
age of the deleted text begin housedeleted text end new text begin residencenew text end from the owner, if unknown by the assessor. The application
may be filed subsequent to the date of the building permit provided that the application
must be filed within three years of the date the building permit was issued for the
improvement. If the property lies in a jurisdiction which is not subject to a building permit
process, the application must be filed within three years of the date the improvement was
made. The assessor may require proof from the taxpayer of the date the improvement was
made. Applications must be received prior to July 1 of any year in order to be effective for
taxes payable in the following year.
No exclusion for an improvement may be granted by a local board of review or
county board of equalization, and no abatement of the taxes for qualifying improvements
may be granted by the county board unless (1) a building permit was issued prior to the
commencement of the improvement if the jurisdiction requires a building permit, and
(2) an application was completed.
deleted text begin (e)deleted text end new text begin (d)new text end The assessor shall note the qualifying value of each improvement on the
property's record, and the sum of those amounts shall be subtracted from the value of the
property in each year for ten years after the improvement has been made. After ten years
the amount of the qualifying value shall be added back as follows:
(1) 50 percent in the two subsequent assessment years if the qualifying value is equal
to or less than $10,000 market value; or
(2) 20 percent in the five subsequent assessment years if the qualifying value is
greater than $10,000 market value.
deleted text begin (f)deleted text end new text begin (e)new text end If an application is filed after the first assessment date at which an
improvement could have been subject to the valuation exclusion under this subdivision,
the ten-year period during which the value is subject to exclusion is reduced by the
number of years that have elapsed since the property would have qualified initially. The
valuation exclusion shall terminate whenever (1) the property is sold, or (2) the property
is reclassified to a class which does not qualify for treatment under this subdivision.
Improvements made by an occupant who is the purchaser of the property under a
conditional purchase contract do not qualify under this subdivision unless the seller of the
property is a governmental entity. The qualifying value of the property shall be computed
based upon the increase from that structure's market value as of January 2 preceding the
acquisition of the property by the governmental entity.
deleted text begin (g)deleted text end new text begin (f)new text end The total qualifying value for a deleted text begin homesteaddeleted text end new text begin propertynew text end may not exceed $50,000.
The total qualifying value for a deleted text begin homesteaddeleted text end new text begin propertynew text end with a deleted text begin housedeleted text end new text begin residencenew text end that is less
than 70 years old may not exceed $25,000. The term "qualifying value" means the
increase in estimated market value resulting from the improvement if the improvement
occurs when the deleted text begin housedeleted text end new text begin residencenew text end is at least 70 years old, or one-half of the increase in
estimated market value resulting from the improvement otherwise. The deleted text begin $25,000 and
$50,000deleted text end maximum qualifying deleted text begin valuedeleted text end new text begin valuesnew text end under this subdivision deleted text begin may result fromdeleted text end new text begin apply
tonew text end multiple improvements to the deleted text begin homesteaddeleted text end new text begin propertynew text end .
deleted text begin (h)deleted text end new text begin (g)new text end If 50 percent or more of the square footage of a structure is voluntarily razed
or removed, the valuation increase attributable to any subsequent improvements to the
remaining structure does not qualify for the exclusion under this subdivision. If a structure
is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
for an exclusion under this subdivision provided that the structure was not completely
destroyed. The qualifying value deleted text begin ondeleted text end new text begin fornew text end property destroyed by a natural disaster shall
be computed based upon the increase from that structure's market value as determined
on January 2 of the year in which the disaster occurred. A property receiving benefits
under the homestead disaster provisions under sections 273.1231 to 273.1235 is not
disqualified from receiving an exclusion under this subdivision. If any combination of
improvements made to a structure after January 1, deleted text begin 1993deleted text end new text begin 2014new text end , increases the size of the
structure by 100 percent or more, the valuation increase attributable to the portion of the
improvement that causes the structure's size to exceed 100 percent does not qualify for
exclusion under this subdivision.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for improvements initially subject to
assessment on January 2, 2016, and thereafter.
new text end
Sec. 2.
Minnesota Statutes 2014, section 273.11, is amended by adding a subdivision to
read:
new text begin Subd. 24. new text end
new text begin
Valuation exclusion for certain improvements; apartment property.
new text end
new text begin
(a) Improvements to apartment property classified as class 4a or class 4d under section
273.13, shall be fully or partially excluded from the value of the property for assessment
purposes provided that (1) the structure is at least 30 years old at the time of the
improvement, and (2) the assessor's estimated market value of the property on January
2 of the current year is equal to or less than $2,000,000. For the purposes of clause (2),
"property" means all contiguous properties under the same ownership.
new text end
new text begin
(b) The age of a structure is the number of years since the original year of its
construction.
new text end
new text begin
(c) If the structure is located in a jurisdiction that is subject to a building permit
process, a building permit must have been issued prior to commencement of the
improvement. The improvements to a single structure in any one year must add at least
$10,000 to the market value of the property to be eligible for exclusion under this
subdivision. Whenever a building permit is issued for property currently classified as
class 4a or 4d apartment, the issuing jurisdiction shall notify the property owner of the
possibility of valuation exclusion under this subdivision. The assessor shall require an
application and may require proof from the taxpayer of the date the improvement was
made and the age of the structure. The application may be filed after the date of the
building permit, provided that the application must be filed within three years of the
date the building permit was issued for the improvement. If the property is located in a
jurisdiction that is not subject to a building permit process, the application must be filed
within three years of the date the improvement was made. Applications must be received
before July 1 of any year in order to be effective for taxes payable in the following year.
new text end
new text begin
No exclusion for an improvement may be granted by a local board of review or
county board of equalization, and no abatement of the taxes for qualifying improvements
may be granted by the county board unless (1) a building permit was issued before the
commencement of the improvement if the jurisdiction requires a building permit, and
(2) an application was completed.
new text end
new text begin
(d) The assessor shall note the qualifying value of each improvement on the
property's record, and the sum of those amounts shall be subtracted from the value of the
property in each year for ten years after the improvement has been made. After ten years,
the amount of the qualifying value shall be added back as follows:
new text end
new text begin
(1) 50 percent in the two subsequent assessment years if the qualifying value is equal
to or less than $40,000 market value; or
new text end
new text begin
(2) 20 percent in the five subsequent assessment years if the qualifying value is
greater than $40,000 market value.
new text end
new text begin
(e) If an application is filed after the first assessment date at which an improvement
could have been subject to the valuation exclusion under this subdivision, the ten-year
period during which the value is subject to exclusion is reduced by the number of years
that have elapsed since the property would have qualified initially. The valuation
exclusion terminates when (1) the property is sold, or (2) the property is reclassified to a
class that does not qualify for treatment under this subdivision. Improvements made by
an occupant who is the purchaser of the property under a conditional purchase contract
do not qualify under this subdivision unless the seller of the property is a governmental
entity. The qualifying value of the property shall be computed based upon the increase
from that property's market value as of January 2 preceding the acquisition of the property
by the governmental entity.
new text end
new text begin
(f) The total qualifying value for a property under this subdivision may not exceed
$250,000. The total qualifying value for a property with a structure that is less than 70
years old may not exceed $125,000. The term "qualifying value" means the increase in
estimated market value resulting from the improvement if the improvement occurs when
the structure is at least 70 years old, or one-half of the increase in estimated market value
resulting from the improvement otherwise. The maximum qualifying values under this
paragraph apply to multiple improvements to the structure.
new text end
new text begin
(g) If 50 percent or more of the square footage of a structure is voluntarily razed
or removed, the valuation increase attributable to any subsequent improvements to the
remaining structure does not qualify for the exclusion under this subdivision. If a structure
is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
for an exclusion under this subdivision provided that the structure was not completely
destroyed. The qualifying value of a property destroyed by a natural disaster shall be
computed based upon the increase from that structure's market value as determined on
January 2 of the year in which the disaster occurred. A property receiving benefits under
sections 273.1231 to 273.1235 is not disqualified from receiving an exclusion under this
subdivision. If any combination of improvements made to a structure after January 1,
2015, increases the size of the structure by 100 percent or more, the valuation increase
attributable to the portion of the improvement that causes the structure's size to exceed
100 percent does not qualify for exclusion under this subdivision.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for improvements initially subject to
assessment on January 2, 2016, and thereafter.
new text end