We have owned a condo at Bluefin Bay along Lake Superior for more than 25 years. It has been a wonderful place for our family to enjoy the wonders of Minnesota’s great outdoors. We are always happy to rent our condo to other families when we aren’t using it, so they can share the same experiences.
But we worry about changes in tax policy that may force us to sell our family vacation spot. In May, the Minnesota Department of Revenue directed county assessors to consider reclassifying short-term rental condos and cabins as commercial businesses. The Cook County assessor, in turn, reclassified our property as commercial/industrial/ utility (class 3a).
Thousands of other cabin and condo owners face the possibility that their property will be taxed the same as a full-time business, which would more than double their property tax bill. Like us, many of them will be forced to sell or pull their property off the rental market because it would be too costly, otherwise.
Short-term rentals provide critical stability for tourism communities and can help attract other investment and development. Fewer short-term rental options would mean fewer tourists, which could undermine their economies. In Cook County, for example, the local chamber of commerce projects that real estate property values could fall 20 percent, and job losses could reach 400. That’s quite a blow for a county with only 5,400 people.
We understand that owners like us should pay a little more in property taxes because we earn some rental income. But we aren’t running a big business, like Walmart, so there must be better way that’s smart and fair.
I am optimistic that the state Legislature can come up with a solution. Already, there is new legislation (House File 3826 and Senate File 3931) that offers a fair middle ground by creating a new tax classification for condos and cabins available for rental.
Please encourage your state lawmakers to support the bills. Let’s do all we can to protect our tourism communities and make sure Minnesota families can continue to enjoy the great outdoors.
Carl and Carol Estey,
Bloomington, MN
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