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SF 5284

Relative homesteads rental licensing requirements prohibition provision

2025-2026 Regular Session Introduced by Glenn Gruenhagen and 1 co-sponsor

Prohibits local rental licensing, inspections, or occupancy certificates for homesteads occupied by a relative of the owner, while preserving homestead status rules.

Referred to Taxes
#realestate #taxation
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Bill Summary · SF 5284

Summary of SF 5284 (2025-2026) – Relative homesteads rental licensing requirements prohibition

Purpose and intent

  • The bill amends Minnesota Statutes to prohibit local licensing, registration, certificates of occupancy, inspections, or similar rental housing requirements for homesteads occupied by a relative of the property owner.
  • Specifically targets relative occupancy of residential homesteads and sets out how homestead status applies when a relative occupies the property, ensuring no rental-licensing burden is imposed by local governments on such arrangements.

Key provisions and changes

  • Section updated: Minnesota Statutes 2024, section 273.124, subdivision 1 (General rule and related provisions).

  • Definitions and general framework (existing provisions retained and clarified):

    • Homestead classifications apply to:
    • Residential real estate used as a homestead by the owner residing in Minnesota.
    • Agricultural land used as an agricultural homestead by the owner residing in Minnesota.
    • Assessor authority to verify continued eligibility and to require filings as needed.
    • Intervening property (noncontiguous land used for homestead purposes) may qualify if used for homestead purposes.

  • New prohibition regarding relatives occupying homesteads (paragraph (c)):

    • A residential real estate property that is occupied and used as a homestead by a relative of the owner is eligible for homestead treatment, but the local jurisdiction must not require:
    • Any rental housing licensing/registration
    • Certificate of occupancy
    • Inspection
    • Any similar document used for rental housing
    • Definition of “relative” includes: parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, niece (by blood or marriage).
    • Additional conditions:
    • A property that has been classified as seasonal residential recreational property in the past is not automatically reclassified as a homestead unless occupied by the owner or a relative.
    • Neither the relative occupant nor the owner may claim a property tax refund under chapter 290A for the relative-occupied homestead.
    • In agricultural land contexts, only the house, garage, and immediately surrounding one acre may qualify for homestead treatment under this relative-occupancy provision, subject to other farm-homestead rules.

  • Additional related provisions (paragraphs (d)–(i) provide constraints and existing rules that interact with the relative-occupancy provision):

    • Agricultural property used as a homestead by a relative is eligible only to the extent the owner would receive for occupying the property themselves, with specific family-relationship and residency requirements, and limits on one agricultural homestead per family.
    • Several scenarios where homestead treatment should not be denied (e.g., when one spouse is absent due to certain situations, or when the owner or spouse resides in a care facility).
    • Provisions ensuring full homestead classification for first-time purchasers who must list a relative on the deed in financing agreements (subject to form requirements).
    • If a child of a deceased owner occupies property under probate jurisdiction, the child retains relative homestead classification until probate concludes.
    • If a homestead also serves as licensed child care, the portion used for child care is classified as part of the homestead.

Who or what is affected

  • Property owners eligible for homestead classification who have a relative occupying the property:
    • No local rental housing licensing/registration or related inspections required for the relative-occupied portion.
    • Implications for property tax treatment are governed by existing homestead rules, with restrictions on tax refunds for the relative-occupied scenario.
  • Local jurisdictions (cities and towns with home rule charters or statutory cities) would be constrained from imposing rental licensing or similar requirements on these relative-occupied homesteads.
  • Agricultural properties with relative occupancy are subject to the defined limits and ownership-residency requirements.

Procedural and timeline aspects

  • Status: Introduced and referred to Taxes on May 12, 2026.
  • House/Senate status not yet indicated other than referral; no specific implementation date provided in the text excerpt.
  • The bill would amend existing statute (273.124, subdivision 1) to codify the prohibition and related clarifications.

Practical implications

  • For homeowners who rent to or share a home with a relative, the bill seeks to reduce regulatory burdens by removing local licensing/inspection requirements for the portion used as a homestead by the relative.
  • Tax treatment remains subject to standard homestead rules, with explicit reminders that neither the owner nor the relative may claim certain property tax refunds under chapter 290A for relative-occupied homesteads.
  • The bill balances flexibility for family arrangements with safeguards around eligibility and consistency with other homestead and agricultural classifications.

If you’d like, I can pull out exact statutory cross-references or compare to current Minnesota law to highlight all changes in a side-by-side format.

Compiled from official sources — confirm details with the bill’s official record.

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