Mortgage Registry Tax Agricultural Loan Exemption

Mortgages securing loans that are used to acquire or improve certain types of agricultural real property are exempt from Mortgage Registry Tax (MRT). View the law, Minnesota Statutes 287.04(9).

Requirements for Exemption

• The original mortgage, or a mortgage that secures a re-financing loan is exempt from MRT if the proceeds of the loans are, or will be, used to purchase or improve “qualifying” agricultural real property.
• The intended use of the qualifying real property is the production for sale of agricultural products. View the law, M.S. 273.13, subdivision 23 (i).

Agricultural products as defined in paragraph (i):

• Livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees, and apiary products by the owner.
• Fish bred for sale and consumption on land zoned for agricultural use.
• Commercial boarding of horses if the boarding is done on property that is also used for raising pasture to graze horses or raising or cultivating other agricultural products.
• Real property owned by a nonprofit organization used for equestrian activities, excluding racing.
• Game birds and waterfowl bred and raised on a licensed game farm for use on a shooting preserve licensed under M.S. 97A.115.
• Insects primarily bred to be used as food for animals.
• Trees grown for sale as a crop, including short rotation woody crops, and not sold for timber, lumber, wood, or wood products.
• Maple syrup taken from trees by a person licensed by the Minnesota Department of Agricultural as a food processor.

In addition, the grading, sorting, and packaging of raw agricultural products for first sale is considered a qualifying agricultural purpose.

Non-Qualifying Uses of the Real Property

• Wholesale or retail sales.
• Processing of raw agricultural products or other goods.
• Warehousing or storage of processed goods.
• Office facilities for the support of agricultural activities.

Mixed Purpose Loans

MRT is due on the non-qualifying portion of the mortgage (e.g., house, garage).

Documentation

A statement claiming the exemption may either be included on the face of the mortgage or as a separate statement attached to the mortgage.