Understanding Your Assessment

Both assessors and elected officials believe that the public acceptance of and support for the property tax is greatly influenced by the ease with which taxpayers can judge the fairness of their assessments, understand the assessment process, and appeal their assessments if they seem to be unfair. In an effort to facilitate this form of approval, Notices of Valuation and Classification are mailed annually to all property owners. This public information activity demonstrates that there is a strong emphasis on openness in assessment administration so assessors can build trust and improve communication with taxpayers. It also validates that there is an easily accessible and inexpensive appeals process in place should there be a need to address questions or concerns about a property assessment.

Q What is a Notice of Valuation and Classification?

A A Notice of Valuation and Classification is a computer-generated form specified for official use by the Commissioner of Revenue. It is used to inform taxpayers about general tax information, changes in their valuation and tax classification, and qualifying factors covering the scheduled appeal and equalization meetings as well as the Minnesota Tax Court option. This notice clearly identifies the property in terms of its assessor's parcel identification number and legal description. It shows tax classification, current and prior assessment, estimated market value, "Green Acres" value, if any,  the value of new improvements, the qualifying amount of any market value subject to a plat deferment,  the qualifying amount of certain improvements subject to a valuation exclusion under the exemption for "This Old House", the taxable market value, the assessor's office address and telephone number, and the dates, places, and times set for the meetings of the local board of appeal and equalization, the review process established for townships and cities who have elected to transfer the local board powers and duties to the county, and the county board of appeal and equalization.

Q Who receives a Notice of Valuation and Classification and when is it mailed?

A This notice is sent to those persons whose property is to be included on the assessment roll if the person's address is known to the assessor.  This information is sent ordinary mail at least ten calendar days before the meeting of the local board of appeal and equalization scheduled to meet between April 1st and May 31st each year. In townships and cities that have elected to transfer the powers and duties of the local board of appeal and equalization to the county, it is mailed at least ten calendar days before the open book meetings with the assessor.

Q If a property owner fails to receive Notice of Valuation and Classification, what should be done?

A The property owner should immediately contact the county assessor's office. There are times when this notice is lost in the mail, returned as undeliverable, or sent to another person because the ownership record and/or mailing address have not been updated by the responsible party. Whatever the cause for not receiving a notice of assessment, Minnesota Statute 273.121 states that in no way is the validity of the assessment, the resulting tax, procedures of any board of appeal and equalization, or the enforcement of delinquent taxes affected.

Q Does the Notice of Valuation and Classification address the property tax impact of the new assessment?

A The probable property tax impact of the new assessment is not addressed through this notification. Tax impact information is published in November of each year on a notice of proposed property tax also known as a truth-in-taxation statement. At that time, the responsibility of elected officials in establishing the property tax levies is made clear. This latter notice provides property owners with an estimate of how much their property tax bill will either increase or decrease due to spending or other factors.

Q What is Estimated Market Value?

A As referred to previously, the Assessor is responsible for valuing property at its Estimated Market value. Estimated Market value can be defined as the highest price in terms of money which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably, and assuming that neither is under undue duress.

According to state law, the Assessor's Estimated Market value is supposed to represent 100% of real value as expressed in the market place. The Minnesota Department of Revenue and the Minnesota Tax Court sit in judgment annually to determine whether the Assessor's Office has done its job according to statute. The performance of the Assessor's Office is measured statistically by the use of sales ratio analysis. By law, assessor's values are to be within 90% and 105% of sale price of the sales period of October 1, 2008 through September 30, 2009 for the 2010 Assessment. If this level of assessment is not achieved, the county is subject to valuation adjustments by the Department of Revenue or The Minnesota Tax Court.

Q How does the Assessor determine Estimated Market Value?

A Minnesota state law requires that the value and classification of all real and personal property be established as of January 2nd each year.  A mass appraisal process is used for estimating market values.  Information from all sales that occur within the county is collected and closely analyzed by the Assessor's Office.  The Assessor's Office then adjusts the Estimated Market Value accordingly.

Q What is the difference between Assessment year and Tax year?

Q Why does my value change when nothing has been done to my property?

A Supply and demand create market value and assessors measure it.  In an appreciating market, as demand increases and the cost of buying property increases, other property values will rise too.  The same is true, in reverse in a declining market. 

Q Why doesn't the Assessor's value reflect the sale price of my property?

A The number one reason is that there is a lag between the time of the assessment and when the sale takes place.  The Minnesota Department of Revenue has a fact sheet "My House is Worth What?" that explains in depth why many times the assessor's estimated market value and the sale price of a property are usually different.

"My House is Worth What?"

Q I don't want the Assessor to view my property; can he/she change the value without viewing it?

A The simple answer is yes and if you don't allow access to your property you lose your right to appeal the value that has been placed on your property.  Minnesota Statute 273.20 states "Assessor may enter dwellings, buildings, or structures."  Any officer authorized by law to assess property for taxation may, when necessary to the proper performance of duties, enter any dwelling-house, building, or structure, and view the same and the property therein.  Any officer authorized by law to assess property for ad valorem tax purposes shall have reasonable access to land and structures as necessary for the proper performance of their duties.  A property owner may refuse to allow an assessor to inspect their property.  This refusal by the property owner must be either verbal or expressly stated in a letter to the county assessor.  If the assessor is denied access to view the property, the assessor is authorized to estimate the property's estimated market value by making assumptions believed appropriate concerning the property's finish and condition.

Q Does the Estimated Market Value increase at the same rate on all properties?

A No, it does not.  There are differences between individual properties and between cities or townships.  In one area the sales may indicate a large increase in value and in another area there may be very little or no change in value.  Also, different types of property within the same area may show different value changes.  There are numerous factors to be considered in each property which will cause value changes to differ.  Some of the factors that can affect value are location, condition, size, quality, basement finish, garages, and many other factors.

Q Can the Estimated Market Value change even if the appraiser has not been inside my property?

A Yes, the Assessor keeps records on the physical characteristics of each property in the county.  Even though the assessor may have been unable to go through your property, the Estimated Market Value will be reviewed based on existing records and sales of similar property.

Q Why is the property classified as non-homestead?

A  In most situations, it is because application for the homestead has not been applied for in the Assessor's Office.

Q Why is the property assessment classification different than the zoning classification?

A Property classification for property assessment purposes is based upon actual use or the highest and best use of the property.

Q Why has my value gone up?

A The assessor has not created the value.  People make value by their transactions in the market place.  Property values are based on market values which fluctuate with general economic conditions such as interest rates, inflation rates, supply and demand and changes in tax laws.  By Minnesota state law, as property values change in the marketplace, those changes will be reflected in the assessor's Estimated Market Value based on history of sales.

Q What will happen to my value if I improve my property?

A Generally speaking, improvements that increase the market value of a property will increase the assessor's market value.  The following are typical improvements that will increase the market value of your property:

            Added rooms or garages

            Substantial updating of kitchen or bath

            Basement or lower level finishing

            Replacing old siding or windows

            Extensive remodeling

Q Will my value go up if I repair my property?

A Good maintenance will help retain the market value of your property.  Generally, your market value will not be increased for individual minor repairs such as those that follow.  However, a combination of several of these items could result in an increase in your value.

            Replacing water heater

            Repairing roof shingles

            Repairing steps or sidewalks

            Repair original siding

            Painting/decorating

            Replacing plumbing or electrical fixtures