More farmers may qualify for tax break

As Minnesota farmers get older, some choose to move off the farm and rent their land. In doing so, they lose an important tax exemption and pay a higher property tax.

A bill approved by the House Agriculture Policy Committee Wednesday aims to change that by allowing more property to qualify as “agricultural homestead” and receive the resulting tax exemption, provided the owner doesn’t move too far away.

The bill next goes to the House Property Tax and Local Government Finance Division. It has no Senate companion.

WATCH Committee discussion of the bill on YouTube

Sponsored by Rep. Duane Quam (R-Byron), HF40 would allow agricultural property to qualify if the owner lives within four townships of the land and the owner, or the owner’s spouse, has farmed it for at least 10 years at some point in the past.

Under current law, this land only qualifies for homestead classification if the landowner, or a close relative, is farming it.

Quam said the bill would help constituents who’ve faced tough choices because of property tax payments.

“I had one gentleman who said, ‘I don’t want to be the one who sells off the [family] farm to pay the taxes,’” Quam said.

But the legislation is only meant to help those who choose to stay nearby.

“This bill is for somebody that’s right there,” Quam said. “It’s not like they moved to New York City and are still trying to get a homestead credit.” 

WATCH Full video of the House Agriculture Policy Committee meeting