The bill amends the Income Tax Act of 1967, specifically section 508, to clarify definitions and conditions related to "gross rent" and "homestead." It specifies that "gross rent" refers to the total rent agreed upon in an arms-length transaction between the landlord and tenant, and allows the department to adjust the gross rent if it is deemed excessive. The definition of "homestead" is also refined to exclude unoccupied real property that is leased or rented by the owner unless it is adjacent to the owner's home. Additionally, it clarifies that the tax on a homestead is proportional to its value relative to the total assessed property value.

Further changes include the treatment of agricultural or horticultural land in relation to homestead status based on the duration of residence and income from such operations. The bill specifies that if a claimant has lived on the land for ten years or more, all adjacent agricultural land is considered part of the homestead, while those who have lived there for less than ten years can claim up to five acres. The bill also updates the definition of "total household resources" to exclude compensation received under the wrongful imprisonment compensation act and adjusts the language regarding net business and rental losses.

Statutes affected:
House Introduced Bill: 206.508