MN SF1957

Modifies property tax classifications for community land trusts, separating owner-occupied units (class 4d(2) at 0.75%) from rental units (class 4a or 4b at 1.25%), effective assessment year 2024.

Creates new class 4d(1) for low-income rental housing with reduced classification rate of 0.25% (previously tiered), while class 4d(2) for community land trust owner-occupied units receives 0.75% rate, effective assessment year 2024.

Requires property owners seeking initial class 4d(1) classification to obtain approval from local city or town governing bodies before applying to the Housing Finance Agency, with exemption if 4d(1) property comprises less than 2% of local net tax capacity.

Directs counties to survey ten largest class 4d(1) properties by November 1, 2025, and report by March 15, 2026, on how property owners use tax savings from the class rate reduction.

Appropriates transition aid to cities in 2025 and 2026 to offset revenue losses from the class 4d(1) rate reduction, with aid amount calculated based on each city's tax rate and modified transition tax capacity.