Market value exclusion modified for veterans with a disability by increasing exclusion amount for totally and permanently disabled veterans.

A bill for an act

relating to taxation; property; modifying the market value exclusion for veterans

with a disability by increasing exclusion amount for totally and permanently

disabled veterans; amending Minnesota Statutes 2024, section 273.13, subdivision

34.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 273.13, subdivision 34, is amended to read:

Subd. 34.

Homestead of veteran with a disability or family caregiver.

(a) All or a

portion of the market value of property owned by a veteran and serving as the veteran's

homestead under this section is excluded in determining the property's taxable market value

if the veteran has a service-connected disability of 70 percent or more as certified by the

United States Department of Veterans Affairs. To qualify for exclusion under this subdivision,

the veteran must have been honorably discharged from the United States armed forces, as

indicated by United States Government Form DD214 or other official military discharge

papers.

(b)(1) For a disability rating of 70 percent or more,
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$150,000
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$225,000
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of market value

is excluded, except as provided in clause (2); and

(2) for a total (100 percent) and permanent disability,
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$300,000
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$450,000
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of market

value is excluded.

(c) If a veteran with a disability qualifying for a valuation exclusion under paragraph

(b), clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the

spouse holds the legal or beneficial title to the homestead and permanently resides there,

the exclusion shall carry over to the benefit of the veteran's spouse until such time as the

spouse remarries, or sells, transfers, or otherwise disposes of the property, except as otherwise

provided in paragraph (n). Qualification under this paragraph requires an application under

paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's

marital status, ownership of the property, or use of the property as a permanent residence.

(d) If the spouse of a member of any branch or unit of the United States armed forces

who dies due to a service-connected cause while serving honorably in active service, as

indicated on United States Government Form DD1300 or DD2064, holds the legal or

beneficial title to a homestead and permanently resides there, the spouse is entitled to the

benefit described in paragraph (b), clause (2), until such time as the spouse remarries or

sells, transfers, or otherwise disposes of the property, except as otherwise provided in

paragraph (n).

(e) If a veteran meets the disability criteria of paragraph (a) but does not own property

classified as homestead in the state of Minnesota, then the homestead of the veteran's primary

family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify

for under paragraph (b).

(f) In the case of an agricultural homestead, only the portion of the property consisting

of the house and garage and immediately surrounding one acre of land qualifies for the

valuation exclusion under this subdivision.

(g) A property qualifying for a valuation exclusion under this subdivision is not eligible

for the market value exclusion under subdivision 35, or classification under subdivision 22,

paragraph (b).

(h) To qualify for a valuation exclusion under this subdivision a property owner must

apply to the assessor by December 31 of the first assessment year for which the exclusion

is sought. Except as provided in paragraph (c), the owner of a property that has been accepted

for a valuation exclusion must notify the assessor if there is a change in ownership of the

property or in the use of the property as a homestead.

(i) A first-time application by a qualifying spouse for the market value exclusion under

paragraph (d) must be made any time within two years of the death of the service member.

(j) For purposes of this subdivision:

(1) "active service" has the meaning given in section
190.05
;

(2) "own" means that the person's name is present as an owner on the property deed;

(3) "primary family caregiver" means a person who is approved by the secretary of the

United States Department of Veterans Affairs for assistance as the primary provider of

personal care services for an eligible veteran under the Program of Comprehensive Assistance

for Family Caregivers, codified as United States Code, title 38, section 1720G; and

(4) "veteran" has the meaning given the term in section
197.447
.

(k) If a veteran did not apply for or receive the exclusion under paragraph (b), clause

(2), before dying, or the exclusion under paragraph (b), clause (2), did not exist at the time

of the veterans death, the veteran's spouse is entitled to the benefit under paragraph (b),

clause (2), until the spouse remarries or sells, transfers, or otherwise disposes of the property,

except as otherwise provided in paragraph (n), if:

(1) the spouse files a first-time application;

(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the

homestead and permanently resides there;

(3) the veteran met the honorable discharge requirements of paragraph (a); and

(4) the United States Department of Veterans Affairs certifies that:

(i) the veteran met the total (100 percent) and permanent disability requirement under

paragraph (b), clause (2); or

(ii) the spouse has been awarded dependency and indemnity compensation.

(l) The purpose of this provision of law providing a level of homestead property tax

relief for veterans with a disability, their primary family caregivers, and their surviving

spouses is to help ease the burdens of war for those among our state's citizens who bear

those burdens most heavily.

(m) By July 1, the county veterans service officer must certify the disability rating and

permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.

(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds

the legal or beneficial title to the property may continue to receive the exclusion for a

property other than the property for which the exclusion was initially granted until the spouse

remarries or sells, transfers, or otherwise disposes of the property, provided that:

(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed

under this paragraph;

(2) the spouse holds the legal or beneficial title to the property for which the continuation

of the exclusion is sought under this paragraph, and permanently resides there;

(3) the estimated market value of the property for which the exclusion is sought under

this paragraph is less than or equal to the estimated market value of the property that first

received the exclusion, based on the value of each property on the date of the sale of the

property that first received the exclusion; and

(4) the spouse has not previously received the benefit under this paragraph for a property

other than the property for which the exclusion is sought.

(o) If a spouse had previously received the exclusion under paragraph (c) or (d) and the

exclusion expired prior to taxes payable in 2020, the spouse may reapply under this section

for the exclusion under paragraph (c) or (d).

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EFFECTIVE DATE.

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This section is effective beginning with assessment year 2027.

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