Ad Valorem Tax: A tax based on the value of real estate or personal property.
Agricultural Homestead Credit: A state credit to buy down the property tax rate paid by agricultural homesteads to the local taxing jurisdiction.
Agricultural Preserves Credit: A reduction in property tax to enable agricultural use of land in areas facing development pressures. Property must be enrolled in the Metropolitan Agricultural Preserve Program in order to receive credit.
Apportionment: The share of property taxes given to each taxing district.
Class Rates: The percent of market value, set by state law, based on use and property type that establishes a property’s tax capacity which is subject to property tax.
Estimated Market Value: An assessor's estimate of what property would be worth if it were sold on the open market.
Disparity Reduction Aid (DRA): A state aid that prevents tax rates from being unreasonably high for a taxing area in relation to similar areas. DRA directly reduces the tax rate, not the certified levy.
Fiscal Disparity: A seven-county metro area aid program in which 40 percent of the commercial/industrial tax base of communities forms a “pool” of aid to metro communities without that tax base. The program promotes better regional planning and improves equity in the distribution of fiscal resources.
Green Acres: A property tax deferral program established for qualifying agricultural properties. Find out more about Green Acres.
Homestead: A residence occupied by the owner or a qualifying relative of the owner.
Levy: The imposition of a tax, usually by a local unit of government.
Levy Limit: The amount a local unit of government is permitted to levy for specific services.
Local Government Aid (LGA): Money from the state provided to cities for property tax relief.
Local Tax Rate: The rate used to determine the property tax due on a property.
Powerline Credit: A property tax credit for certain properties that are crossed by high-voltage power lines.
Market Value: An assessor’s estimate of what property would be worth if it were sold on the open market.
Property Classification: The use of each parcel. For instance, property may be residential homestead (owner-occupied), residential non-homestead, agricultural, or commercial. Each classification is taxed at a different percentage of market value.
Property Tax: A tax levied on any kind of property.
Property Tax Refund: A partial property tax refund program for those who have property taxes out of proportion with their income. This program is available to homeowners and renters.
Referendum Market Value: The value of a property that is subject to taxation through a levied referendum. For most classifications, the referendum market value equals the estimated market value.
Sales Ratio Study: A 12-month time period study of open market sales that is conducted by the Minnesota Department of Revenue. The study is then used as a guide to ensure that a property's market value adequately reflects the market.
School Building Bond Credit: A reduction in school property tax for agricultural, rural vacant and managed forest land. The house, garage, and first acre of land of an agricultural homestead is not eligible for the credit.
Special Assessment: An improvement that directly benefits the property or other qualifying charges that is added as a separated amount to the tax statement. The property's market value is not used to determine the amount of a special assessment.
State General Property Tax: A state-imposed property tax on commercial, industrial and seasonal recreational properties.
Taxable Market Value: The estimated value determined by an assessor minus applicable exclusions and deferments.
Tax Capacity: The valuation of property based on market value and class rates, on which property taxes are determined.
Tax Increment Financing (TIF): A financing tool available to certain taxing districts to promote local development. TIF does not increase or decrease the taxes of a property. It directs a portion of the taxes generated by new development to pay for qualifying costs. To learn more about tax increment financing, read the House Research Report.