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Frequently
Asked Questions
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Why
does the estimated market value of my property
go up when I have made no improvements? |
All property is to be valued at market value.
If sale prices of property increase, we are
required to adjust our values on all like
property to reflect what is being paid in
the market.
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What
effect does the construction of large, expensive
homes in my neighborhood have on my value
and taxes? |
The construction of new homes will tend to hold
your property taxes down. The new home will
likely be paying a large amount of taxes compared
to what the taxes were when the property was
bare land. Since property taxes are assessed
based on the amount of money local units of
government need to collect to operate, this
new house will be paying a portion of what existing
properties had paid the year before. Your value
is based on actual market so the new house will
not directly affect your value. If construction
of new homes in your area enhances sales prices
of existing homes, you will experience a valuation
increase based on the overall market change.
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Do
your estimated market values ever go down? |
Yes, market values can go down if the overall
market for property goes down. An example would
be agricultural property values that decreased
dramatically during the late 1980's. The Assessor's
Office reduced the value of all agricultural
property at that time because of declining sale
prices.
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If
I pay less for my property than the Assessor's
market value, will my value be reduced to
the amount I paid? |
Not necessarily. Some properties sell for less
than market value because of
circumstances surrounding the sale. Examples
would be relative sales, foreclosure sales,
limited exposure to the market, etc. Your property
still needs to be valued in relation to other
property. We also do not automatically raise
the value of a property to the sale price if
it sells for more than our estimated
market value .
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If
I feel my property value is too high or my
property is incorrectly classified, what can
I do? |
Your first step should be to contact the Assessor's
Office with your questions. The office will
review your assessment with you and listen to
your appeal. If need be, an appointment can
be made to visit your property. It is possible
that an error could have occurred that can be
corrected in this way. If this is not satisfactory,
your next step is to appeal formally to the
Board of Review which is held each year after
you receive your assessment notice. If you are
not satisfied with results of this Board, you
may appeal to the County Board of Equalization.
If you still feel your assessment is incorrect,
you may appeal to Tax Court.
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How
close to actual market does the Assessor's
Market value have to be? |
The State Board of Equalization requires our
median sales ratio be between 90% and 105%.
For example: A property sells for $100,000 that
has an estimated market value of $90,000. This
would be a 90% ratio of value to sales price.
The median ratio is the middle ratio of the
group of sales of a particular type in a taxing
district. If the median ratio is outside the
90% to 105% range, the State Board will normally
order aggregate value changes to bring values
into the correct ratio for that taxing district.
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With
all new buildings being built and all the
increases in value for property, why don't
property taxes go down? |
The answer to this question involves a number
of factors to be considered. The cost to operate
local units of government continues to increase
the same as other costs. Local units of government
are required to provide certain services that
continue to go up in cost and the budgets go
up to reflect the increased costs. This is passed
on to the taxpayers. Aids for local units of
government, such as homestead credit supplied
by the State of Minnesota, have been reduced
over the years so the government units increase
levies to make up for the loss of revenue. Classification
rate reductions for some classes of property
can cause the share another class of property
has to pay to go up. As you can see, a number
of factors affect the tax each individual pays.
These examples cover only some of the reasons.
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How
often is the Assessor required to value my
property? |
The law requires that at least 1/5 of the properties
should be viewed and reassessed each year. Market
adjustments are made to all properties every
year even if it was not physically viewed. All
new construction is to be valued each year.
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What
are the requirements for homestead classification? |
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The basic requirements are that the property
be owned and occupied for homestead purposes
and that the person must be a Minnesota State
resident. Residency includes such things as
filing Minnesota income taxes as a resident,
Minnesota car license, Minnesota driver's license
and if you vote, it must be where you are claiming
homestead. These are just some of the more important
requirements and other things can be taken into
account. Relatives of the property owner can
also receive a homestead under current law.
Ownership and occupancy must be established
by December 1 and application must be made no
later than December 15 of the assessment year
to receive homestead for that year. All
new homesteads must make application. |
Why
are taxes on lakeshore property higher than
off-lake property? |
The
reason lakeshore property usually pays more
taxes than a similar property not on the
lake is due to the value of the lakeshore
frontage. Property taxes are based partially
on value; and the higher the value, the higher
the tax. Sales prove that lakeshore in most
cases is much more valuable than other land
types. Each lake has its land valued according
to the price buyers will pay which varies
greatly from one lake to another, depending
on the popularity of the lake. Other factors
such as school district and township or city
tax rates will affect the level of taxes
from one property to another. When comparing
value or taxes, always make sure you are
comparing comparable properties in an area
of similar tax rates.
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