Low-Income Rental Classification (LIRC)

Minnesota Statutes 273.128 provides that qualifying low-income rental properties are eligible for a property use classification that has a lower tax class rate thereby reducing the property tax obligation for a qualifying property. The LIRC statute specifies the type of properties that are eligible and requirements to receive the reduced tax class rate.

The 2023 legislative session included several changes to the LIRC program, including lowering the tax class rate for eligible properties, requirements to expend the additional property tax savings on certain eligible expenses, and new qualifying criteria for initial applications to LIRC.

Program Information

Refer to the LIRC Program Guide for complete program details.

Qualifying Properties are at least 20% of total units in the rental property must meet one or more of the following criteria:

Project Based Section 8,
Low Income Housing Tax Credits,
Rental Assistance units financed through Rural Housing Service of USDA,
Rent and income restrictions at or below 60% Area Median Income placed on units by state, federal, or local unit of government as evidenced by a document recorded against the property.

For qualifying properties, the eligible units use the 4d(1) tax class rate of .25%. The lower tax class rate applies only to that portion of the rental property meeting all eligibility criteria. The regular rental class rate of 1.25% will apply to the remainder of the property. Market value determined by the assessor must be based on the standard approach to valuation using unrestricted market rents.

It is the responsibility of the owner to inform Minnesota Housing of any changes throughout the year. Failure to do so may result in missed communication or the loss of classification.

Application

Include a non-refundable application/reapplication fee of $10 per qualifying unit; total fee not to exceed $150.

Applicants must reapply each year to receive the reduced tax class rate. The application deadline is March 31 each year for taxes payable the following calendar year. Late applications/reapplications will not be accepted.

Initial Application Form [PDF Fillable] | [RTF Fillable] - This form is for new applicants only.

Renew Application Form [PDF Fillable] | [RTF Fillable] - For previous participants only. Previously enrolled properties will receive a property specific Reapplication Cover Letter by mail.

2025 LIRC Assessor Report - [PDF version] | [XLS version (coming soon)]

Resolution Requirement

Any 2025 LIRC Initial Applications submitted to Minnesota Housing for properties in Blackduck, Fort Snelling, Lexington, Meadowlands, and Onamia must include a signed resolution from the city or town where the property is located approving the Applicant’s ability to submit an Initial Application to Minnesota Housing. These are the Cities and towns where the net tax capacity of the 4d(1) properties exceeds 2% of the total net tax capacity in the city or town.

Reference the optional sample resolutions and the Minnesota Department of Revenue published list.