Classification is a definition of how the property is used, determined by its ownership and use. Classifications such as homestead, timber, commercial, and agricultural describe the primary use of a property, and affect the amount of property tax paid. By state law, various classes of property are taxed at different rates. For example, two neighboring homes of equal value will be taxed at different rates if one is a homestead and one is a non-homestead property. Class rates are created and defined by the Minnesota State legislature. New homeowners should contact their assessor to apply for the preferential homestead classification rate.