Minnesota Homestead Market Value Exclusion for a Surviving Spouse

Section 273.13, subdivision 34 carries the $300,000 exclusion to a surviving spouse by four separate routes, and the routes have moved twice in the last five years in the spouse's favour. The first route is the carryover. Where a veteran who qualified at the total and permanent tier dies before the spouse, and the spouse holds legal or beneficial title and permanently resides there, the exclusion carries over. It carries over until the spouse remarries, or sells, transfers or otherwise disposes of the property, and there is no longer any time limit attached to it. That last sentence used to read differently. Until 2021 the carryover ran for the current taxes payable year plus eight additional years and then stopped. Laws 2021, First Special Session, chapter 14, article 6, section 8 struck the eight-year cap, effective beginning with assessments in 2021, and added the portability paragraph described below. Paragraph (o) then lets a spouse whose exclusion had already expired before taxes payable in 2020 reapply. Any source describing a five-year or eight-year run for a Minnesota surviving spouse is at least five years out of date. The second route is death in service. Where the spouse of a member of any branch of the United States armed forces who dies due to a service-connected cause while serving honorably in active service, as shown on Government Form DD1300 or DD2064, holds title and permanently resides there, the spouse takes the $300,000 tier directly. A first-time application on this route must be made within two years of the death of the service member. The third and fourth routes both sit in paragraph (k), which is for the spouse of a veteran who never claimed. Where the veteran did not apply for or receive the total and permanent exclusion before dying, or the exclusion did not exist at the time of death, the spouse is entitled to it if the spouse files a first-time application, holds title and permanently resides there, the veteran met the honorable discharge requirement, and VA certifies either that the veteran met the total and permanent requirement, or that the spouse has been awarded Dependency and Indemnity Compensation. DIC alone is therefore a sufficient certification. The spouse does not have to reconstruct the rating the veteran held. Because DIC is itself awarded where the death was service-connected or the veteran was totally disabled for a qualifying period, the federal determination does the work. Paragraph (k) has also moved. It used to apply only to a veteran "dying after December 31, 2011", and it used to require the first-time application within two years of the death or by June 1, 2019, whichever was later. Laws 2023, chapter 64, article 3, section 20 removed both, effective beginning with assessment year 2023. There is now no death-date cutoff and no deadline on the paragraph (k) application. The Department of Defense benefits library still lists "veteran died after December 31, 2011" as a condition of eligibility. It is not one. Portability was added at the same time as the removal of the eight-year cap. A spouse holding the exclusion under the carryover, the death-in-service route or paragraph (k) who no longer holds title to that property may move the exclusion to another property once, if the spouse applies, holds title to the new property and permanently resides there, the new property's estimated market value is less than or equal to that of the original measured on the date the original was sold, and the spouse has not used this once before. One sale, no trading up. Remarriage ends all four routes. So does selling, transferring or otherwise disposing of the property without using the one-time move.