Your Taxable Home Value
The State of Minnesota requires assessors to physically inspect all parcels once every five years or 20% of each city or township. If the assessor has not left you a note or knocked on your door during your assessment cycle, they usually make an arbitrary appraisal of the property. This will include assuming that the interior is as appealing as possible or is typical for that type of property (i.e. good condition/recently remodeled, finished basement, added bath, etc.). They may also consider permits, ask the neighbors, glance in your windows.
Examples of improvements that will increase the assessor's estimated market value of your property:
- Added square footage or garages,
- Substantial modernization of kitchens or baths,
- Central air conditioning,
- Fireplaces,
- Extensive remodeling,
- finished basements,
- new decks/patios
How does the property assessor calculate my property value?
The property characteristics are entered into a computerized system. Some of the factors that can affect value are location, condition, size, quality, number of baths, basement finish, garages, and many others. The computer aids the Assessor in estimating the property value. Information from actual sales is used to update your market value. There are differences between individual properties and between neighborhoods. In one area the sales may indicate a large increase in value in a given year. In another neighborhood there may be very little or no change in value. Different types of property within the same neighborhood may show different value changes. As mentioned above, there are numerous factors to be considered in each property, which will cause value changes to differ.
What value will the county assessor give my property?
The market value estimated by the Assessor should be at, or very close to, the amount the property would sell for if placed on the open market. (Market Value equals the price that would prevail under competitive, open market conditions.) The State Board of Equalization requires the overall level of assessment to be between 90% and 105% of market value. The annual assessment reports provided by the assessors are completed on January 2nd and form the basis of property taxes payable in the following year.
These factors in combination with the 5-year cycle in a very quickly changing real estate market can cause your Assessor's taxable value to be dramatically off from actual Market Value.
Assessors are NOT Appraisers or Real Estate Agents
Assessors play a key role in our property tax system. They evaluate land, buildings, and other structures for property taxes, the main source of funding for local governments in Minnesota. Assessors receive licensure through the Minnesota State Board of Assessors. This is not the same as an appraisers license or a real estate salesperson license. They all create market value reports a little differently but generally arrive at similar values if they are all using the same accurate sales data. The biggest difference is that your real estate agent should strongly consider MARKET CONDITIONS in their value estimation in addition to the property specific details.
What if I think the assessor's value is wrong?
If you disagree with how your property was assessed, you can contact the county assessor’s office or I can help you:
If your property has not been inspected recently (both interior and exterior) and you feel the taxable assessed value is high, ask the assessor to review your property.
If you and the assessor are unable to agree on your property valuation or classification, you can make a formal appeal. The methods of appeal are detailed on the back page of the “Notice of Valuation and Classification” statement.
What's on your home's property tax statement?
Check out your tax statement and shoot me a note about how you think it compares to your home's current value.
