Kevin owns a duplex in Saint Paul, Minnesota. He lives in one unit as his primary residence and rents the other unit to a tenant. How will this property most likely be classified for Minnesota property tax purposes?
Correct Answer
D) Partially as homestead for the owner-occupied unit and partially as non-homestead for the rental unit
Under Minn. Stat. § 273.124, a duplex or multi-unit residential property where the owner occupies one unit as a primary residence receives a split classification: the owner-occupied portion is classified as homestead (receiving the lower tax rate and market value exclusion), while the rented portion is classified as non-homestead residential and taxed at the higher non-homestead rate. Minnesota applies classification on a unit-by-unit basis for such properties.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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