Agricultural Homestead (Archive)

This section of the manual provides instruction on determining if a home is considered an agricultural homestead for purposes of the Home Equity Limit.

In addition to the information provided, see the Agricultural Homestead Flowchart for a visual illustration of the process.

Definitions.

Determining an Agricultural Homestead.

Determining the Value of an Agricultural Homestead.

Example.

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Definitions

The following terms are used exclusively in the application of the home equity limit.

Agricultural Homestead The property located on agricultural land that meets the definition of "home" and includes the dwelling, the garage, if any, and one acre of land immediately surrounding the dwelling..

The property located on ”r;agricultural land” that meets the definition of ”r;home” and includes the dwelling, the garage, if any, and the one acre of land immediately surrounding the dwelling.

Note:  If any farm buildings or structures are located on the agricultural homestead, then the market value of those structures are not included in the value of the agricultural homestead.

Agricultural Land A contiguous acreage, of 10 acres or more, used during the preceding year for agricultural purposes, or a contiguous acreage, of less than 10 acres, which is exclusively and intensively used for raising or cultivating agricultural products..

A contiguous acreage, of 10 acres or more, used during the preceding year for ”r;agricultural purposes,” or a contiguous acreage, of less than 10 acres, which is exclusively and intensively used for raising or cultivating agricultural products.

Agricultural Products Examples of agricultural products include but are not limited to livestock, dairy animals and products, poultry animals and products, fur-bearing animals, horticultural and nursery stock, fruits, vegetables, forage, grains, bees, and apiary products..

Examples of agricultural products include but are not limited to:

l  Livestock.

l  Dairy animals and products.

l  Poultry animals and products.

l  Fur-bearing animals.

l  Horticultural and nursery stock.

l  Fruits.

l  Vegetables.

l  Forage.

l  Grains.

l  Bees.

l  Apiary products.

Agricultural Purpose Use of property for the production of products or services offered for sale by the owner..

Use of property for the production of products or services offered for sale by the owner.

Agricultural Services Agricultural services include, but are not limited to: 1) Commercial boarding of horses if the boarding is done in conjunction with raising or cultivating agricultural products. 2) Fish bred for sale and consumption if the fish breeding occurs on land zoned for agricultural use. 3) Property which is owned and operated by nonprofit organizations used for equestrian activities, excluding racing. 4) Game birds and waterfowl bred and raised for use on a shooting preserve. 5) Insects primarily bred to be used as food for animals. 6) Trees, grown for sale as a crop, and not sold for timber, lumber, wood or wood products. 7) Maple syrup taken from trees grown by a person licensed by the Minnesota Department of Agriculture as a food processor. 8) Enrollment in the Reinvest in Minnesota program or the federal Conservation Reserve Program. 9) Leasing all or a portion of the property to another person for agricultural purposes..

Examples of agricultural services include but are not limited to:

l  Commercial boarding of horses if the boarding is done in conjunction with raising or cultivating agricultural products.

l  Fish bred for sale and consumption if the fish breeding occurs on land zoned for agricultural use.

l  Property which is owned and operated by nonprofit organizations used for equestrian activities, excluding racing.

l  Game birds and waterfowl bred and raised for use on a shooting preserve.

l  Insects primarily bred to be used as food for animals.

l  Trees, grown for sale as a crop, and not sold for timber, lumber, wood or wood products.

l  Maple syrup taken from trees grown by a person licensed by the Minnesota Department of Agriculture as a food processor.

l  Enrollment in the Reinvest in Minnesota program or the federal Conservation Reserve Program.

l  Leasing all or a portion of the property to another person for agricultural purposes.

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Determining an Agricultural Homestead

A determination of whether or not a home is considered an agricultural homestead is only needed when the home’s equity is first determined to be over the equity limit. See LTC/EW Home Equity Limit for details on that process.

A home Property an applicant or enrollee owns in whole or in part or has an ownership interest in, and in which he or she occupies, or occupied immediately prior to receiving LTC services, as the primary dwelling. A home includes the primary dwelling, all surrounding land and any building on that land, provided the land is not separated from the dwelling by property owned by another person. Land separated from the dwelling by a public right-of-way is included in the definition of the home. is located on agricultural land A contiguous acreage, of 10 acres or more, used during the preceding year for agricultural purposes, or a contiguous acreage, of less than 10 acres, which is exclusively and intensively used for raising or cultivating agricultural products. if the land is either:

l  On 10 or more contiguous acres, the property must be used for the production of agricultural products Examples of agricultural products include but are not limited to livestock, dairy animals and products, poultry animals and products, fur-bearing animals, horticultural and nursery stock, fruits, vegetables, forage, grains, bees, and apiary products. or agricultural services Agricultural services include, but are not limited to: 1) Commercial boarding of horses if the boarding is done in conjunction with raising or cultivating agricultural products. 2) Fish bred for sale and consumption if the fish breeding occurs on land zoned for agricultural use. 3) Property which is owned and operated by nonprofit organizations used for equestrian activities, excluding racing. 4) Game birds and waterfowl bred and raised for use on a shooting preserve. 5) Insects primarily bred to be used as food for animals. 6) Trees, grown for sale as a crop, and not sold for timber, lumber, wood or wood products. 7) Maple syrup taken from trees grown by a person licensed by the Minnesota Department of Agriculture as a food processor. 8) Enrollment in the Reinvest in Minnesota program or the federal Conservation Reserve Program. 9) Leasing all or a portion of the property to another person for agricultural purposes. offered for sale by the owner.

l  Less than 10 contiguous acres, the property must be used exclusively and intensively used for raising or cultivating agricultural products Examples of agricultural products include but are not limited to livestock, dairy animals and products, poultry animals and products, fur-bearing animals, horticultural and nursery stock, fruits, vegetables, forage, grains, bees, and apiary products..

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Determining the Value of an Agricultural Homestead

To determine the equity value of the agricultural homestead subtract verified encumbrances from the fair market value (FMV) listed on the tax records.

Note:  The FMV may or may not be listed on the tax documents. If it is not listed the client must either:

l  Contact the county assessor for the verification.

l  Sign a consent for release form allowing the worker to contact the county assessor for the information.

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Example

Hank, who is single, filed an application for MA payment of LTC services under the Elderly Waiver program on July 20, 2006. He lives with his son and daughter-in-law, both 29 years old, on the family farm.

Hank is the sole owner of all of the buildings and land on the farm which has a verified value of two million dollars. He also has verified a mechanic’s lien on the property of $100,000.

Action:

Based on the home equity value of $1,900,000 ($2,000,000 - $100,000), Hank is not eligible for MA payment of LTC services unless his home qualifies as an agricultural homestead.

Hank reports, after being contacted by his worker, that he raises dairy cows and chickens on the land. He sells the milk and the eggs at market.

Action:

Hank’s home meets the definition of an agricultural homestead because it has more than 10 contiguous acres used to produce agricultural products.

Hank sends in his property tax information. It indicates on the record that the agricultural homestead is valued at $550,000. The mechanic’s lien was filed against the value of the house.

Action:

Hank’s home’s equity value is now within the home equity limit ($550,000 - $100,000 = $450,000). He is eligible for MA payment of LTC services if all other eligibility criteria are met.

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