Homesteading 2 properties?

[Lindsey Janicke-Tuff]

I've read that you can Homestead two properties in Minnesota if a relative lives in the other one. Are there rules around charging rent? And is there a tax benefit? The information on the county website is unclear.

If anyone has experience with this or knows reasons NOT to Homestead two properties, weigh in!

Thank you!

[Tim Swierczek]

@Lindsey Janicke-Tuff I wouldn't rent to a relative just to save the non-homestead taxes.  They have very little impact on the cost in MN.  That being said you can claim homestead if the relative meets MN's criteria.  Here are the guidelines below.  Just to reiterate.  It's likely you will not save enough on the exemption to justify a greatly reduced rent for the relative vs the market rent for a true investment property.

Residential Relative Homesteads
Residential real estate that is occupied and used for the purposes of a homestead by a relative of the owner is a homestead to the extent of the homestead treatment that would be provided if the related owner occupied the property. Qualifying relatives for residential property, which may be by blood or by marriage, include:

• Aunts
• Brothers
• Children
• Grandchildren
• Grandparents
• Nephews

• Nieces
• Parents
• Sisters
• Step-children
• Step-parent
• Uncles

Qualifying Residents
To qualify for a residential relative homestead, the owner does not need to be a Minnesota resident but the qualifying relative must be a Minnesota resident.