How is property tax assessed in Minneapolis, MN?
March 23, 2016 1:39 PM Subscribe
We were told that the taxes are based on the assessed value of the home, and that it didn't vary by neighborhood-- i.e. a $300k-valued home would pay the same property taxes whether it was in ritzy mc-ritzville or the wrong side of the tracks. But when we looked at property taxes, they seem to vary wildly by neighborhood. What gives?
Is a $300k home taxed at a much higher rate in a fancy neighborhood than in a less fancy one? How does school district factor in? Help us understand this byzantine system!
Is a $300k home taxed at a much higher rate in a fancy neighborhood than in a less fancy one? How does school district factor in? Help us understand this byzantine system!
I'm on the board of (tax) abatement in my town and here are a few things in my area (not your area) that would affect this. All the houses in my town are in one school district so that's not an issue here.
- size of parcel house is on (i.e. more land = more taxes)
- some neighborhoods may be special districts with extra services (like different police coverage or sewer coverage)
- outbuildings (over and above the $ amount of the house)
But yeah this is a very locally determined thing but should be a decently easy question to specifically answer.
posted by jessamyn at 2:06 PM on March 23, 2016
- size of parcel house is on (i.e. more land = more taxes)
- some neighborhoods may be special districts with extra services (like different police coverage or sewer coverage)
- outbuildings (over and above the $ amount of the house)
But yeah this is a very locally determined thing but should be a decently easy question to specifically answer.
posted by jessamyn at 2:06 PM on March 23, 2016
Are you comparing taxable value with taxes paid? Or estimated market value with taxes paid? We own in Minneapolis and the increase in taxable value as far as my taxes are concerned hasn't kept pace for what houses are selling for by us...
posted by advicepig at 2:33 PM on March 23, 2016
posted by advicepig at 2:33 PM on March 23, 2016
All of Minneapolis is in the same county, school district, metropolitan mosquito control district, etc. It is also all served by the same police force. So some of the answers above that may apply to other cities wouldn't make sense in Minneapolis.
Are you looking at just the property taxes or are you also considering the special assessments? You can be assessed to pay a share of work done adjacent to or near your property that is considered to have benefitted your property. The City gives some examples at this page. As you'll see, the types of project for which the City sometimes levies special assessments is pretty wide-ranging.
Also, like advicepig mentioned, are you comparing the assessed values or some other measure of value such as listing prices in real estate ads? It may be that a house was assessed at $250,000 or something and is actually now worth $300,000, but the City Assessor's Office hasn't kept up with the increase in property values in that neighborhood. They have certainly been late in catching certain trends over the years, including some of the decreases that happened during the big recession.
Have you tried just calling up the City Assessor's Office and speaking to someone there? I haven't dealt with the Minneapolis Assessor, but I have dealt with municipal and county assessors elsewhere in Minnesota and they can be surprisingly informative.
posted by Alluring Mouthbreather at 2:36 PM on March 23, 2016 [1 favorite]
Are you looking at just the property taxes or are you also considering the special assessments? You can be assessed to pay a share of work done adjacent to or near your property that is considered to have benefitted your property. The City gives some examples at this page. As you'll see, the types of project for which the City sometimes levies special assessments is pretty wide-ranging.
Also, like advicepig mentioned, are you comparing the assessed values or some other measure of value such as listing prices in real estate ads? It may be that a house was assessed at $250,000 or something and is actually now worth $300,000, but the City Assessor's Office hasn't kept up with the increase in property values in that neighborhood. They have certainly been late in catching certain trends over the years, including some of the decreases that happened during the big recession.
Have you tried just calling up the City Assessor's Office and speaking to someone there? I haven't dealt with the Minneapolis Assessor, but I have dealt with municipal and county assessors elsewhere in Minnesota and they can be surprisingly informative.
posted by Alluring Mouthbreather at 2:36 PM on March 23, 2016 [1 favorite]
To compute a property's tax, you'd need to know the assessed value, the class rate, the local tax rate, and the amount of any applicable credits for the property. Minnesota's House of Representatives' research department has an ok Property Tax 101 series: 1, 2, 3, 4.
Minnesota had a "This Old House" program whereby older properties could make improvements and get an exemption for the increased assessment value relating to those improvements. The max exemption period ended in, I believe, 2013 (10 years after the end of the program), but it then phases out over a period of five years.
There are also reductions for homesteads of blind and disabled persons and veterans and credits for various other things.
posted by melissasaurus at 2:56 PM on March 23, 2016
Minnesota had a "This Old House" program whereby older properties could make improvements and get an exemption for the increased assessment value relating to those improvements. The max exemption period ended in, I believe, 2013 (10 years after the end of the program), but it then phases out over a period of five years.
There are also reductions for homesteads of blind and disabled persons and veterans and credits for various other things.
posted by melissasaurus at 2:56 PM on March 23, 2016
Minnesota capped the amount that property taxes could go up for a number of years. It will be a while before ours catches up to market value.
http://www.ci.minneapolis.mn.us/assessor/propertytaxes/index.htm#P32_7214
posted by advicepig at 2:57 PM on March 23, 2016
http://www.ci.minneapolis.mn.us/assessor/propertytaxes/index.htm#P32_7214
posted by advicepig at 2:57 PM on March 23, 2016
Our Minneapolis house was reassessed in person this year because we finished a flood-related basement rebuild and the city noticed that the permits were closed. The assessor based the new value based on the new finished basement square footage and "comps" (comparable houses sold in the neighborhood). I called after we got the new property tax notice and my brain exploded (our house has gone up in taxable "value" $90,000 in 4 years). The assessor said our house assessment was finally in line with neighborhood property values after skirting under the radar for years, but that we were welcome to appeal. We didn't appeal because we figured they'd just jack up the assessed value in subsequent years to make up for it, as we live in a popular neighborhood with a busy real estate market.
posted by Maarika at 7:35 PM on March 23, 2016
posted by Maarika at 7:35 PM on March 23, 2016
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These things vary significantly locally-- have you looked at the information on the City of Minneapolis Assessor's Office website or the Minnesota Center for Public Finance Research's Understanding Your Property Tax Changes document?
posted by Kpele at 1:54 PM on March 23, 2016 [2 favorites]