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In Minnesota, property taxes provide most of the funding for local government services. Each share of the property tax burden is determined according to its value and use. The Assessor's Office collects, tabulates, and updates property data annually to be used in further county calculations. The dollar amount required to cover operating expenses of local governments is levied by each township, city, school district, and county to pay for services required by local citizens. This translates into an annual property tax bill due and payable for each individual property.
There are three entities that have a role in determining your property tax:
There are a number of items that affect your property taxes. The following are those that traditionally have had the largest impacts:
Values are set by transactions in the market place. Property values are based on market values which fluctuate with general economic conditions such as:
By Minnesota state law, as property values change in the marketplace, those changes must be reflected in the Assessor's estimated market value.
If all property sees a similar change in value, your property class hasn't changed, the local government agencies don't have to increase their budgets, and there is no change in classification rates by the state legislature, there will be no change in your tax bill. Taxing authorities actually determine how much money the property tax has to generate to provide services to the taxpayer.
Minnesota has what is known as an ad valorem property tax system. This means property tax is divided among taxable properties according to their value. A mass appraisal process is used for estimating this value. Information from all sales that occur within the county is collected and closely analyzed by the Assessor's Office.
The Assessor's Office then adjusts market values by comparing properties that sold within a given area with properties that have not sold. This sales comparison by means of substitution provides the basis for the estimated market value of taxable property.
The final amount of property tax the owner pays in any given year is the end result of a process that begins over two years before property tax statements are actually mailed to property owners.
No, there is no limit on how much an estimated market value can increase or decrease.
No, it does not. There are differences between individual properties and between cities or townships. In one area the sales may indicate a large increase/decrease in value, and in another area there may be very little or no change in value. Also, different types of property within the same area may show different value changes.
There are numerous factors to be considered in each property which will cause value changes to differ. Some of the many factors that can affect value of a property include:
Yes. The Assessor keeps records on the physical characteristics of each property in the county. Even though the Assessor may have been unable to go through your property, the estimated market value will be reviewed based on existing records and sales of similar property. The Assessor’s Office is required by law to look at all sales in all areas in the county each year and adjust values based on the current selling prices of property, regardless of whether or not it has been a scheduled reassessment year for the property.
Generally speaking, improvements that increase the market value or selling price of a property will increase the Assessor's estimated market value. The following are typical improvements that will increase the market value of your property:
Good maintenance will help retain the market value of your property. Generally, your market value will not be increased for individual minor repairs such as those that follow. However, a combination of several of these items could result in an increase in your value.