According to the Minnesota Department of Revenue,
“Each spring your county sends you a Notice of Valuation and Classification. Three factors that affect your tax bill are:
- The amount your local governments (town, city, county, etc.) spend to provide services
- The estimated market value of your property
- The classification of your property (how it is used)
The assessor determines the value and classification of your property; you may appeal if you disagree.”
Every March 31, counties throughout Minnesota mail out property tax statements, which outline property value for taxes payable for the current year, how your tax burden is calculated (taxes and credits), as well as any change to your home’s taxable market value.
This last number can be fun to see. For instance, if you recently purchased a home for $225,000 and the taxable market value is now $237,500, it feels like instant equity. Cha-ching!
However, this number directly correlates to an increase in the dreaded total property tax amount. And an increase here can mean cutting back on fun stuff like vacations and artisan cocktails. Wa-waaaa…
While many things factor into how property tax is calculated, it’s essentially derived by crunching numbers from real estate assessments and recent comparable sales. This is not the same as fair market value. It’s also a lagging indicator, meaning that whether prices are rising or falling, your tax obligation will not reflect this change until the following year.
If the new number you’re seeing on your property tax statement seems exorbitant, or you simply don’t know how you can wrangle another dollar for the Regional Rail Authority, there’s hope! The Minnesota Department of Revenue allows owners to appeal their assigned value and classification.
Additionally, certain households may qualify to pay less by way of a:
- Property Tax Refund (income-based),
- Special Homestead Credit Refund (more than 12% increase, or at least $100 and not due to improvements on the property), or
- Senior citizen property tax deferral.
To find out about any of these options, visit the Minnesota Department of Revenue website.
Or, for a more comprehensive market analysis based on the unique characteristics of your home and property, and compared to similar, recently sold homes, contact me to chat!
(While renters don’t pay this type of tax, they may qualify for a refund, nonetheless.
Angela Anderson, REALTOR® RE/MAX Results HomesMSP Team
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