One of the benefits of owning your own home are the deductions you can get on your income taxes. Another benefit of owning your own home and living in it, is the discount you can get on your property taxes.
Minnesota is one of the states that gives a credit or discount on property taxes to homeowners for living in their property. It is the state's method of encouraging owner occupancy and discouraging landlords. The homestead credit is significant. On my personal home, the homestead credit reduces my payable tax by 30%.
A little published tidbit about Minnesota homesteading is that a relative can rent a property from you and qualify that property for a homestead credit. Savvy property owners consider this option when they send a child to college. A property in the child's college town can be purchased and rented to the college bound child and several other students. As long as the child resides in the home, the taxes will receive a homestead credit reducing the tax expense normally associated with rental property. This reduction in the property taxes increases the potential for income from the child's tour of duty in college!
Relatives that can qualify a property for the homestead credit include the owner’s parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. The relationship can be either by blood or by marriage. The relative must be a Minnesota resident, occupy the property as his/her primary residence, and be a qualifying relative. Applications for the residential relative homestead classification can be obtained from your county assessor and be completed and signed by the qualifying relative. More information about homesteading can be obtained from the Minnesota Department of Revenue.
(c) Bonnie Erickson 2006
Posted August 21, 2006
Glad it was helpful. Thought you might appreciate this info to support our previous conversation. Sometimes it's good to go right to the source instead of believing what others say! ;-) BE
Posted by: Bonnie Erickson | November 24, 2006 at 12:51 AM
Posted August 21, 2006
Thank you Bonnie, this is going to help Kellie's sister a whole bunch.
-Chris
Posted by: Chris | November 24, 2006 at 12:50 AM