Exempt Properties

What is a property tax exemption?
A property that meets certain criteria does not pay general property taxes. The exempt property may be required to pay for special assessments, services, or, under certain circumstance, may be required to pay a portion of the property’s income in lieu of the general property tax.

What kind of property is eligible for an exempt classification?
Generally; except for tribal land, all property is taxable unless the land is used for a public purpose, education, religious or charitable ministration.  Properties may include:

• Public burying grounds

• Wind energy conservation systems

• Public schools

• Transitional housing

• Public hospitals

• Electric power distrubution lines

• Academies, colleges, universities and seminaries of learning

• Public property used exclusively for public purposes

• Churches, church property and houses of worship

• Institutions of purely public charity

• Personal property used primarily for the abatement and constol of air, water and land polution

• Waste water treatment systemsoperated by a municipality

• Manure pits certified by the MPCA

For a complete list of properties that may qualify for exempt classification, refer to MN Statue Chapter 272, Section 02. 

How do I know if an organization qualifies for exemption as an Institution of Purely Public Charity?
There are six factors used as guidelines resulting from the 1975 Supreme Court of Minnesota court case Northstar Research Institute vs. County of Hennepin.  They are:

1. whether the stated purpose of the undertaking is to be helpful to others without immediate expectation of material reward;

2. whether the entity involved is supported by donations and gifts in whole or in part;

3. whether the recipients of the “charity” are required to pay for the assistance received in whole or in part;

4. whether the income received from gifts and donations and charges to users produces a profit to the charitable institution;

5. Whether the beneficiaries of the “charity” are restricted or unrestricted and, if restricted, whether the class of persons to whom the charity is made available is one having a reasonable relationship to he charitable objectives: and,

6. Whether the dividends, in from or substance, or assets upon dissolution are available to private interests.

How do I apply for a property tax exemption?
File the required documents with the City of Edina Assessor’s Office.  The documents are:

• State Application for Property Tax Exemption; Form CREX97 (available from the MN Dept of Revenue website or from the Edina Assessor’s office.

• Deed(s) to the property

• Articles of Incorporation

• The letter from the Internal Revenue Service granting tax exempt status under Internal Revenue Code 501(c)3

• Income and Expense statements and IRS Form 990 Return

• Leases or other agreements for space used by individuals or other entities

• A detailed written explanation of ALL intended uses of the property

• Other documents and records unique to the specific property

Owners must make available to the Assessor all necessary books and records relating to the ownership and use of the property which can help verify whether or not the property qualifies for exemption.

Churches; houses of worship; property used solely for educational purposes by academies, colleges, and seminaries of learning and property owned by the State of Minnesota or any of its political subdivisions are not required to file the state application for exemption. These entities  however must make available to the assessor all necessary books and records relating to the ownership and use of the property to help verify exemption from state property tax.

If approved for a tax exempt classification would all parcels owned by the same entity automatically receive the exempt classification?
Not necessarily. Each parcel must satisfy all of the requirements for exemption. Also a parcel that is incidental to the operation of the organization may not be eligible for exemption. There must be necessary, substantial and continuing use of the parcel for an exempt purpose by the organization in order for the parcel to be considered for exemption.

What is the cost to file application for property tax exemption?
There is no application fee. However, if the application is not filed in a timely manner, an abatement may be necessary which may require a fee.

How long does it take to process an application for exempt classification?
It can take as little as a week or as long as three months due to complexities surrounding use and ownership of the property.  Please be patient as every effort is made to process applications as quickly as possible.

What assurance do I have of being approved for an exempt classification?
Making application does not equate approval for exemption from general property tax classification. Each government entity has the authority to approve or deny the request for exemption. Complete and accurate supporting documentation will aid in a decision in your favor. You will be notified whether your request was approved or denied.

Is there recourse if my application is denied?
You may appeal the assessor’s decision to the Minnesota Tax Court.

Upon approval when does an exempt classification take affect?
Property subject to the general property tax on Jan. 2 that is acquired and used for an exempt purpose before July 1 of the same year will qualify for an exempt classification for that assessment year and will not pay a general property tax the following year.

When does an exempt classification end?
A property with an exempt classification on Jan. 2 losing its exempt classification before July 1 of the same year is placed on the assessment roll that year. Property taxes will be due and payable the following year.