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Cashing in on the cabin

Published (3/7/2008)
By Courtney Blanchard
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Minnesota is the Land of 10,000 Lakes and more than 100,000 cabins.

Not all of the cabins are on a lakeshore, but there are about 115,200 “seasonal recreational” properties in the state, according to the Department of Revenue. Whether it’s a cabin, summer home or hunting shack, the owner is not eligible for a property tax refund from the state. That would change with HF2348, sponsored by Rep. Ron Erhardt (R-Edina).

The bill was laid over Feb. 29 by the House Property Tax Relief and Local Sales Tax Division for possible inclusion in its omnibus bill. There is no Senate companion.

To be eligible for a refund, the owner’s annual income couldn’t exceed $96,300. The maximum refund would be about $1,800, at an annual cost of about $9 million to the state.

About 25 percent of homeowners claim a refund on their property taxes, and if given the option, about 20 percent of cabin owners would claim a refund, according to the department.

“A house is a house,” said Jeff Forester, executive director of the Minnesota Seasonal Recreational Property Owners Coalition, who added that most cabin owners are not rich, and oftentimes split expenses among a large extended family.

According to the group, the average annual income for a cabin owner is under $60,000, and most have owned their cabin for more than 25 years. He said increasing land values are making it too expensive for people to hold onto their cabins. Oftentimes, owners are pressured into selling to developers who split parcels, resulting in cleared woodlands and crowded lakeshores, Forester said.

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