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HF1488 (Legislative Session 94 (2025-2026))

Property tax; requirements for class 4d(1) low-income rental housing modified.

Related bill: SF33

AI Generated Summary

This bill amends Minnesota Statutes 2024, Section 273.128, Subdivision 1, to modify the requirements for class 4d1 low-income rental housing property tax classification.

Key provisions: 1. Eligibility Criteria: A rental property classified as class 4d1 is eligible for special valuation if at least 20% of its units meet one of the following conditions: - They are part of a Housing Assistance Payments contract under Section 8 of the U.S. Housing Act of 1937. - They are rent- and income-restricted as part of a qualified low-income housing project receiving tax credits under Section 42(g) of the Internal Revenue Code. - They are financed by the U.S. Department of Agriculture’s Rural Housing Service and receive rental assistance under Section 521(a) of the Housing Act of 1949. - They are subject to rent and income restrictions under financial assistance provided by federal, state, or local government, requiring initial resident income no greater than 60% of the greater of area or state median income, and rents not exceeding 30% of that income level.

  1. Use of Property Tax Savings: Owners of class 4d1 properties must use the tax savings for one or more of the following:

    • Property maintenance
    • Property security
    • Improvements to the property
    • Rent stabilization
    • Contributions to the property's replacement reserve account

  2. Annual Certification Requirement:

    • Property owners must annually reapply and certify to the Minnesota Housing Finance Agency that the tax savings were used for eligible purposes to maintain the 4d1 classification.
    • Properties that previously received the 4d1 classification must demonstrate compliance with these use requirements to continue receiving the classification.

The bill reinforces accountability by ensuring that tax benefits provided to low-income housing properties are reinvested into their maintenance, security, and affordability.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 23, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A new requirement for property owners to apply and certify the use of tax savings for eligible uses each year."
      ],
      "removed": [],
      "summary": "The bill modifies the requirements for class 4d1 low-income rental housing, amending section 273.128 subdivision 1.",
      "modified": [
        "The eligible uses for property tax savings are specified, including property maintenance, security, improvements, rent stabilization, and replacement reserve account increases."
      ]
    },
    "citation": "273.128"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references classification as class 4d1 under section 273.13 subdivision 25 for low-income rental property.",
      "modified": []
    },
    "citation": "273.13"
  }
]

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