Mobile home cooperatives could receive tax credit for land under the residence

Living in a manufactured home park can be an unstable existence. In what are commonly referred to as mobile home parks, even if a resident owns the home, that doesn’t mean that they own the land beneath it. Hence, the land can still be sold and the homeowner forced to move.

Rep. Connie Bernardy

But some owners of these manufactured homes have circumvented that possibility by purchasing the land beneath them in a cooperative arrangement with their neighbors. There are eight such parks around Minnesota, consisting of about 600 households. But, while these residents can receive a property tax refund on their homes, they can’t get the same renter’s credit on the land as a conventional landlord.

A bill held over Monday by the House Property and Local Tax Division for possible omnibus bill inclusion would change that.

Rep. Connie Bernardy (DFL-New Brighton) sponsors HF458, which would eliminate a specific prohibition against ground lease payments being included as part of the property tax payments of those in manufactured home park cooperatives.

Under the bill, 17 percent of rent paid for the land would be included as property taxes payable under the homestead credit refund, something that’s already available to land owners who lease units to tenants.

According to a Department of Revenue assessment of the bill, about 150 residents would see their property tax refund increase by an average of $600 beginning in Fiscal Year 2021, while another 325 residents are projected to become eligible and receive an average refund of $400.

There is no Senate companion.