Minnesota Homestead Law: Not Just Reducing Property Taxes

By
Real Estate Sales Representative with Shrewd Real Estate
http://actvra.in/FXN

At a closing, everyone who is buying a home as their principal residence in Minnesota is informed about how to homestead their new property.  People are generally more than willing to homestead a property as they feel that it will keep their property taxes lower.  While this is true, it is not the only reason to homestead a property.

The Homestead Law is meant to protect a family from a forced sale (foreclosure) on their home by unpaid creditors.  In a nutshell, it's a safe haven for your money.

There are several stipulations that are mandated in order for a property to be homesteaded.  The easiest description is that your homestead needs to be your principal residence.  There are other rules involved, but this rule of thumb covers about 99% of all situations.

What does homesteading a property protect you from?

The Homestead Law protects home owners against foreclosure of their home by unpaid creditors.  It does not protect a home owner from foreclosure due to lack of property tax or special assessment payments, mechanics liens (work performed by contractors on the property), lack of payment to mortgage company, or failure to pay association dues.  All of these items are attached to your property and will supersede the Homestead Law.  Rule of thumb: The banking institutions and the government will always get their money.

This also brings up a very good point about having good title work done on a property prior to closing the sale.  You do not want any outstanding liens for assessments or lack of payment to a contractor to make you lose your newly purchased house to foreclosure.  I won't go into this here; It's a different topic for a different day.

There are also a couple of limitations to the amount of money that is covered by Homestead Law.  In Minnesota, homestead protection is limited to 160 acres and $300,000 for a residential homestead ($750,000 for an agricultural homestead).

Please note that these figures are for Minnesota Homestead Laws and do not entail what other States utilize as their guidelines.  I've heard that the old CEO of Enron moved into a property in Florida when his business came under attack.  The reason, there is no limit to the value that homesteading can protect in that State.  He can shelter millions of dollars against judgments in court about his business practices.

If you are in question about homestead law, seek competent legal advice.  I don't pretend to be a lawyer that knows everything related to real estate law, but I know enough to get me in trouble.  If you'd like, post your questions and comments here.  If I don't know the answers, I know someone who will.

 

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty St Cloud

JasonTangen.EdinaRealty.com - Search Homes for Sale in Minnesota

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Just wondering how many homes can a person own and have them homesteaded in the state of MN?

sbrecht@ll.net

 thanks for your response

Jun 08, 2008 08:44 AM #1
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Jason Tangen
Shrewd Real Estate - Saint Cloud, MN

As long as you are within the guidelines and have an approved family member living within each property, it is my understanding that a person can have an infinite number of properties homesteaded in Minnesota.

Jun 10, 2008 11:40 AM #2
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My mom owns a home which she sold and will transfer on Jan 26,2009. She bought a new home, into which she plans to move on Dec 31,2008. She takes legal possession on Jan 2,2009. Does she have to stay in the old house on dec 31, 2008 to qualify for home stead on the old house.

Dec 28, 2008 09:17 AM #3
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Jason Tangen

I wouldn't worry about the lapse in time between ownership.  The tax status won't change fast enough to keep up with the moving time frames.  Besides the fact that the difference between one month as a non-homesteaded property vs. a homesteaded property is negligible in most situations.

In Minnesota, residents file for their homestead statuses by the 15th of December of the year they purchase the home.  Unless something changes, the county continues with the previous status for each property and you don't need to file anything new.  I would wager that your mom didn't go to the county to change her homestead status for 2009 at her old house before the 15th.

I hope this answers your question.  If not, give me a call at (320) 492-2667

Dec 28, 2008 09:15 PM #4
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Max Green

So I can homestead one house and have my wife homestead another house.  As long as I live in one and my wife lives in the other.  I will live in one of the houses while I fix it up.

Max Green

Mar 20, 2009 01:44 PM #5
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Jason Tangen

Max,

You could theoretically homestead like that - it might be kind of tough to prove that you and your wife aren't living at the same residence.  You might want to consult a real estate attorney if you want to try and split hairs with the homesteading laws.

Jason Tangen - http://StCloudEdina.com

 

Mar 23, 2009 07:42 AM #6
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Carol Boisvert

I have a questions regarding the monetary downside to leaving your homestead property on a lake and moving to a smaller home?  If they still own the lake home. I am asking this for my elderly parents who live in Minnesota. Thank You

Jul 26, 2009 10:04 AM #7
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Jason Tangen
Shrewd Real Estate - Saint Cloud, MN

Carol,

It depends on their situation if there is a downside to moving off the lake.  Sometimes their is just too much work for an elderly couple to maintain at a lake property and they need to move into move of transitional housing.  Maybe not quite senior housing, but more like a patio home development.  Situation really dictates in your scenario.  Give me a call at (320) 492-2667 with some of the particulars and I will go over my thoughts with you.

Jul 30, 2009 06:51 AM #8
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Janine J

I am potentially moving to another state to pursue a career opportunity.  I intend to rent in that state for a few years while I get settled, and keep my condo in MN for use when I return home for visits.   I also own a townhome in MN in which a relative lives (she pays no rent or expenses).   I maintain personal homestead on the condo as it is my primary residence and resident relative homestead on the townhome.   As I will be working and living in another state, do I need to change the homestead status on the condo?

Jul 20, 2011 09:22 AM #9
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Keith

My wife and I own our home. If I buy a townhome and my mother lives in it and pays me rent, am I still allowed a homestead on both properties?

Jul 29, 2011 03:30 PM #10
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Keith Jensen

Ian't There something in the homestead law that alows a person to homestead connected properties also?

Aug 06, 2012 02:01 PM #11
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