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 policy.

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

Determining an Agricultural Homestead.

Determining the Value of an Agricultural Homestead.

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Determining an Agricultural Homestead

A determination of whether a home is considered an 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. is only needed when the client's home equity interest is determined to be greater than the home equity limit. See LTC 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:

l  10 or more contiguous acres and the property is 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 and the property is used exclusively and intensively 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 Home Equity of an Agricultural Homestead

To determine the equity value of an agricultural homestead, subtract verified encumbrances from the estimated market value (EMV) listed on the property tax records. Use the EMV listed on the property tax records, rather than fair market value (FMV), for agricultural homesteads. Tax records verify that the homestead qualifies as an agricultural homestead.

The EMV may not be listed on the property tax documents, but may be available on the county assessor’s website. If it is not listed on tax documents or available on the web site, the client must either:

l  Contact the county assessor for the verification, or

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

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.

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 adult son and daughter-in-law on the family farm.

Hank is the sole owner of all of the buildings and land on the farm which has a verified EMV of $2 million. He also has verified a mechanic’s lien on the property of $100,000.

Action:

Based on Hank's home equity interest 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.

Contact Hank for information on how he uses the farm land.

Hank reports that he raises dairy cows and chickens on the land. He sells the milk and the eggs at market. His home meets the definition of an agricultural homestead.

Hank sends in his property tax information. The EMV of the agricultural homestead is $550,000. The mechanic’s lien was filed against the value of the house.

Action:

Hank’s home’s equity interest is 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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