Owner-Built Home Sold As New Construction?

[Mike Adams]

Hey, all. Question for you experts...

Can a tradesperson build their own home in Minnesota, live in it for several months, and then sell as new construction? We are looking at a property that was being built by someone to be their own home but now a few months after completion, they have listed it as new construction. The sales agent said he's built and sold other homes through her, so at first, it seemed like he is more like a GC who does this on the reg, but now it sounds like he and his family used the property last summer for family gatherings, etc. and actually lived there for awhile. 

So this doesn't seem right to me...if I see "new construction" as a buyer, I:

a) assume the home has never been occupied, and

b) that licensed contractors were used to build all aspects to state code, to offset the lack of required inspections.

I know homeowners can do their own work, but shouldn't that imply occupancy and be listed as previously owned home vs. new construction? Otherwise, it seems like a loop hole to avoid licensure, insurance, cap gains, etc...which feels deceptive.

Am I wrong here? Anyone been in this situation? The home looks beautiful, but ya know...looks can be deceiving. We were going to buy this as a rental prop.

Thanks!