Homestead vs Non-Homestead in Minnesota

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When you buy a home in Minnesota, one of the most important things to understand is whether your property is classified as homestead or non-homestead. Your homestead status determines how much you pay in property taxes, what tax exemptions you're eligible for, and what financial protections apply to your home.

What Is a Homestead?

A homestead is a primary residence—where you live and occupy full-time. When a property receives homestead status, it becomes eligible for tax savings and other protections under Minnesota law. This classification matters because it determines how your property is taxed and whether you qualify for certain exemptions.

What Is the Homestead Tax Exemption?

With a homestead classification, you may receive a homestead tax exemption, which reduces the taxable market value of your home. Less taxable value means lower property taxes each year. You must own and live in the property for it to qualify, and approval is filed through your county assessor. Once granted, the exemption remains active as long as the home continues to be your primary residence.

How the Homestead Tax Exemption Works

The homestead tax exemption helps reduce how much of the property’s market value is taxed. When a home qualifies, a portion of the value is excluded from taxation, lowering annual property taxes.
For many homeowners, the homestead tax exemption provides long-term savings—especially valuable as property values rise.

Homeowners who meet occupancy and ownership requirements can file for the homestead tax exemption with their county. Once approved, the exemption continues as long as the home remains the owner’s primary residence.

Homestead vs Non Homestead in Minnesota: Key Differences

The difference between homestead and non-homestead properties impacts how much you pay in taxes:

Classification: Homestead

Description: Primary residence owned and occupied by the homeowner

Tax Benefits: Lower taxes + eligibility for exemptions

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Classification: Non-Homestead

Description: Rental, investment property, secondary home, or property you do not live in

Tax Benefits: Higher taxes + no homestead exemption

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If the home is not your main residence, it is considered non-homestead. These properties do not receive the same tax reductions and generally result in a higher annual tax bill.

Knowing and understanding each will provide clarity when planning for taxes, estate decisions, or future home changes. This knowledge helps people avoid unexpected tax increases and ensures they receive all available homeowner benefits.

Whether you’re a first-time homeowner or reviewing an existing property, understanding homestead vs non-homestead Minnesota classifications can have a major impact on your long-term financial planning. Taking the time to confirm your homestead status ensures your home is properly classified and that you receive the tax benefits you qualify for.

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