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Low Income Rental Classification (LIRC)

The tax bill adopted by the Minnesota Legislature in the 2005 legislative session and signed by the Governor on Wednesday, July 13, 2005 made significant changes to the property tax classification rate for qualifying low-income rental properties. This results in a class rate reduction of up to 40% for qualifying units in some rent and income-restricted properties.

Only those rental properties subsidized under a federal or state government program or meeting certain rent and income restrictions are eligible for the lower class rate. Applications must be made to Minnesota Housing for certification to the local assessor that a property qualifies for the reduced rate.

Details
Classification Rate is .75% (reduced from 1.25%)
Qualifying Properties are at least 20% of total units in the rental property must meet one or more of the following criteria:

  • Project Based Section 8,
  • Low Income Housing Tax Credits,
  • Rental Assistance units financed through Rural Housing Service of USDA,
  • Rent and income restrictions at or below 60% Area Median Income placed on units by state, federal, or local unit of government as evidenced by a document recorded against the property.

Note: The lower tax rate applies only to that portion of the rental property meeting all eligibility criteria. The regular rental class rate of 1.25% will apply to the remainder of the property. Market value determined by the assessor must be based on the standard approach to valuation using unrestricted market rents.

Application
Application Fee is $10 per qualifying unit; total fee not to exceed $150. Application deadline March 31 each year for taxes payable the following calendar year. View this legislation.

Application Form (fillable rtf) - Downloadable form and instructions (for new applicants only). The application deadline is March 31.
Note: Personalized "Reapplication" forms for currently enrolled properties are being sent by mail.

Frequently Asked Questions

If you have questions, contact:
Crystal Sheppeck at 651.296.8064
Toll Free 1.800.657.3647