What is the new Market Value Exclusion?
The 2011 Legislature repealed the Homestead Market Value Credit, and replaced it with a new Homestead Market Value Exclusion. The change, effective for taxes payable in 2012, will commonly result in tax increases. Under this new exclusion, there will be no state paid credit, but rather the entire property tax levy will be paid by local taxpayers. Because the exclusion is a reduction in the value subject to tax, tax rates and the taxes of all properties will be affected. Homestead values will be reduced which will shift a larger share of the tax burden other property types and homes with higher values. The MN Department of Revenue explains these changes further. Also see this video provided by Minnesota Public Radio explaining the effects of the Market Value Exclusion
Why are the notices sent out after the general election?
Minnesota Statutes require that the notices be mailed after Nov. 10 but before Nov. 24.
What factors affect my property taxes?
There are a number of items that affect your property taxes. The following have the largest impacts:
- Changes to the tax levy (amount of money requested from property taxes) made by the city, county, school district or special taxing districts
- Changes to the market value of your property
- Changes in the market values for the area or a particular type of property. Note: 2013 taxes are based on the Jan. 2, 2012 market value and classification
- Legislative changes to the property classification rates, state aid formulas and other tax laws
- Legislative unfunded mandates
- New taxes approved by referendum
Who determines your property tax?
There are three entities that determine your property tax:
- State Legislature: Establishes property classes and class rates, determines levels of state aid to local units of government, sets the amount of homestead credit, sets the state general tax rate and mandates programs to local government.
- Local government: Local units of government determine their tax levy amount.
- County assessor: Assigns each property a market value and property classification as provided by state statute. Note: Taxes due in 2013 are based on the Jan. 2, 2012 market value and classification. This Timeline shows how your assessed value affects your property tax bill.
The property tax is the result of actions taken by all three entities.
What happens at the proposed tax public hearings?
The taxing jurisdiction will give a budget presentation followed by public comment and questions. All cities and school districts will hold separate meetings on different dates.
If property values are decreasing, does this mean less tax dollars for Governmental units?
No. Governmental units must propose a tax levy each year. Property value increases or decreases simply adjust the tax base that the tax levy is applied against.
If a local government doesn't increase its levy, property owners may still see increases in property taxes if their values are increasing faster than other properties.
Note: Property Values for Payable 2013 are based on the Jan. 2, 2012 assessment of property. The 2011 assessment looked at sales between Oct. 1, 2010 and Sept. 30, 2012. Values are reviewed and adjusted each year. This Timeline shows how your assessed value affects your property tax bill.
Why are some taxing jurisdictions not holding a Proposed Tax Public Hearing?
Under State statutes, taxing jurisdictions that meet certain criteria are exempt from holding a public proposed tax hearing. These taxing jurisdictions are:
- Cities with a population under 500
- County, city, school districts or metropolitan special taxing districts that do not exceed its previous year property tax levy adjusted for inflation.
- Special taxing districts (housing and redevelopment authorities, city port authorities, hospital districts, regional rail authorities and watersheds)
Is it likely that the amount on my Proposed Tax Notice will be different than the amount on my tax statement?
Yes, it is likely they will differ. The Proposed Tax Notice is an estimate. They may differ for any of the following reasons:
- Referendums could pass, increasing your tax
- Property owners can file for homestead classification if they own and occupy their homes by Dec. 1
- Taxing jurisdictions can lower their tax levy
- Although not a tax, special assessments and other charges may be billed on the tax statement
Why does the total shown for last year not match what I paid?
The proposed tax notice does not include amounts for special assessments and special service charges that appeared on last year’s tax statement. If your property had a contamination tax, it also does not include that amount.
What is a special assessment?
A special assessment is an improvement, which directly benefits the property. Common assessments include streets, sidewalk and sewers. It is shown as a separate amount on the tax statement and is not included on the Proposed Tax Notice. The amount is based on how much the property benefits from the improvement and the cost of the project. The property's market value is not used to determine the amount of the special assessment.
Why are special assessments and other charges or fees not shown on the Proposed Tax Notice?
The special assessment information is not available from the cities at the time notices are prepared. Also, the intent of the Proposed Tax Notice was to provide the property owner with a parcel specific impact of a tax jurisdictions anticipated budget. Special assessments are not a part of the budget process as it relates to property tax levies.