WDAZ: Your Home Team

Published December 19, 2009, 06:06 PM

Minnesota Cabins See Tax Increase

A change in state law may make it more difficult for Minnesota cabin owners to keep their seasonal homes.

By: Christine Boggy, WDAZ

A change in state law may make it more difficult for Minnesota cabin owners to keep their seasonal homes.

It's a common luxury, a lake home out of town and for some people out of state. However come 2010 that luxury may no longer be available.

Steve Swanson/Lake Property Owner: "People have been here for fifty years and they've just had to sell the property due to tax increases."

Minnesota seasonal homeowners have benefited from something called the limited market value that has been a part of Minnesota's property tax system since the seventy's but the 2000 Legislature voted to phase out limited market value by 2009.

Debra Johnson/Lake Property Owner: "We're paying for the school districts in two community's and they phase out that limited value I think when you look back at what they've done with our property increases it seems like were getting hit twice."

Owners have seen increases since 2000 while the state attempted to slowly phase out the program, but with the end of 2009 quickly approaching, some cabin owners will see increases of 30 percent or more.

Johnson:"We've been experiencing about a 30 percent increase in taxes over the last few years because the fair market value of our property has gone up."

Lake property is being hit the hardest because its value has increased more rapidly than other real estate and it has many people taking out loans, just to pay taxes.

Swanson:"They've had to go into their retirements or take some type of loans just to pay for their taxes."

Because cabin owners will now be paying more, many people who don't have lake property will see their property taxes stay about the same or go down. In the meantime, homeowners who are struggling with the tax hike are even more concerned for their retired neighbors on fixed incomes.

Swanson: "A lot of people have had cabins out here older couples and it's taxing them out."

Property taxes for next year must be finalized by December 28th.