Minnesota Property Taxes
Overview of Minnesota Property Taxes
Unless exempted, every homeowner in the state of Minnesota must pay property taxes every year. Minnesota property taxes are a major source of revenue for local government units including counties, cities, townships, and school districts. They fund important government services like schools, parks, police and fire departments, maintenance and construction of roads, and garbage collection.
Every year, the state and its local governments collect $58.8 billion in total revenue. Of that, $8.9 billion or 15.12% of total revenue is from property taxes. Minnesota is generally a high tax state and the average homeowner pays $11.39 for every $1,000 of home value in property taxes. The average Minnesota property tax bill adds up to $2,517. However, that figure depends on the county in which your property is located. For instance, homeowners in Aitkin County pay an average of $999 while those in Benton County pay $2,035.
How do Minnesota property taxes work? The process starts with County Assessors placing a value on your property. Minnesota laws require that properties be assessed at their market value or estimated market value (EMV), which is the price the property would sell for in the open market. Assessors typically use a comparable sales approach to value your property where they compare the sales prices of similar properties to determine your property's value. If you qualify for exemptions offered by the state, a portion of your property's value can be excluded from taxation. The remaining amount is known as the net tax capacity and is the amount on which Minnesota property tax rates are applied.
Minnesota property taxes are based on a property's classifications according to their current use. For residential properties, the class rate is computed at 1.00% for the first $500,000 in taxable market value and 1.25% for the remainder. If a property has an EMV of $400,000, its net tax capacity would be ($400,000 x 0.01) $4,000. The net tax capacity is then multiplied by the tax rate set by the taxing jurisdiction to calculate the tax bill. Assuming a property is worth $400,000 and is located in a taxing district with a 50% tax rate, the Minnesota property tax bill would add up to ($4,000 x 50%) $2,000.
If you are planning to buy a home in Minnesota and want to understand how much your property tax bill could potentially cost, check out our Minnesota Property Tax Tool to see what your bill would be.
Minnesota Property Tax Due Dates
In Minnesota, the financial year runs from July 1 and ends on June 30. Properties are assessed as of January 2 every year and homeowners can expect to receive their Valuation Notices in March/April. The notice contains the property's estimated market value and its classification, all of which form the basis for Minnesota property taxes. You can appeal property taxes if you disagree with the assessed value of your property, although you cannot appeal its classification. The appeal process starts with the homeowner contacting the Assessor's Office with their objections to the assessed value. If the dispute is not resolved in the initial meeting with the assessor, homeowners can appeal to the Local/County Board of Review County Board of Equalization and finally, the Minnesota Tax Court.
When are property taxes due in Minnesota? The state of Minnesota allows homeowners to pay property taxes in two installments. The first of which is due on May 15 and the second being due on October 15. Should the due dates fall on a weekend or holiday, they are pushed to the next business day. However, if a Minnesota property tax bill is less than $100, it must be paid in full by the first installment. It should be noted that failure to receive a tax bill does not excuse homeowners from paying their taxes on time.
Taxes that are unpaid after Minnesota property tax due dates result in penalty charges computed at 10% per year. The interest rate increases every month until the tax is paid in full. Minnesota property taxes become delinquent on the first business day in January of the subsequent year the taxes were due. For delinquent taxes, interest is charged on the unpaid tax, penalty, and fees. Homeowners have a three-year redemption period to clear any delinquent taxes, accrued interest, and any additional penalties. If taxes remain unpaid at the end of the redemption period, a forfeiture process is initiated and the property is turned over to the state.
Minnesota Property Tax Exemptions
In addition to the option to appeal property taxes if a homeowner disagrees with their property's valuation, the state of Minnesota offers several exemptions for eligible homeowners including the homestead and senior exemptions. Homeowners can potentially save hundreds of dollars in Minnesota property taxes if they qualify for these exemptions. Individuals are still subject to Minnesota property tax due dates, regardless of their exemption eligibility.
Minnesota Homestead Exemption
Minnesota's homestead exemption, also known as the Homestead Market Value Exclusion, reduces an eligible homeowner's property's taxable market value which ultimately lowers their Minnesota property tax bill. To qualify for this exemption, the subject home must be valued under $413,800. The exemption is also used as a qualifying factor for homeowners to receive the State of Minnesota Property Tax Refund.
Minnesota Senior Citizens Exemption
Minnesota's senior exemption is known as Property Tax Deferral for Senior Citizens. It allows qualified senior citizens to defer a portion of the Minnesota property taxes they owe. Beneficiaries of this program pay 3% of their total household income in property taxes based on the preceding year's income. The rest of the property taxes are paid by the state as a loan. If the property is sold or the homeowner willingly defers the program, they have to repay the loan plus interest computed at no more than 5%. To qualify, the homeowner must be aged at least 65 years, have owned and lived in the home for 15 years, and have an annual household income not exceeding $60,000. More information about this exemption can be found on the Minnesota Department of Revenue's website.
Other Minnesota property tax exemptions include the Disabled Veteran Homestead Valuation Exclusion. Under this exemption, disabled veterans receive a property tax exemption of up to $300,000 on their principal residence's taxable value. The veteran's disability must be 100% related to military service. Veterans whose disabilities are 70% related to military service receive an exemption of up to $150,000. The surviving, unmarried spouse of an eligible veteran also qualifies for this exemption.
How to Appeal Your Property Taxes in Minnesota
You may appeal property taxes in Minnesota if you disagree with the assessor's valuation and classification of your property. The appeal starts with contacting the Assessor's Office with your complaints. The Assessor explains the criteria used to value and classify your property. If you and the assessor are unable to agree, you can file an official appeal with the Local or County Board of Appeal and Equalization depending on the location of your property. If you are not satisfied with the decisions of the local or county board, you can appeal to the Minnesota Tax Court. Homeowners can only appeal their property's valuation and classification, not the tax rates.
The process of filing an assessment appeal varies across Minnesota though it generally follows the same steps from county to county:
- Obtain your assessment
- Determine if you are overassessed
- Complete forms needed to appeal
- File property tax appeal
- Prepare for hearing
- Attend hearing
- Appeal the decision
How to Appeal Your Property Taxes in Hennepin County
To help you understand how to appeal your property taxes in Minnesota, here is a breakdown of the process in Hennepin County, Minnesota's most populous county.
Obtain your assessment
If you own property in Hennepin County, you can easily obtain your assessment and classification details from your Notice of Value. You can also contact the County Assessor.
Determine if you are over-assessed
The valuation of your property is based on the comparable sales of similar properties. You can use TaxProper's search tool to look for sales of nearby similar units and compare their selling prices to your property's valuation.
Complete forms needed to appeal
The forms you need to appeal property taxes in Hennepin County will be provided to you by the Assessor's Office.
File property tax appeal
Detailed instructions on how to file your property tax appeal can be found on your Notice of Value. The state of Minnesota also provides a detailed guideline on the appeal process
Prepare for hearing
The County Assessor is presumed by law to have correctly valued and classified your property. It is upon you as the taxpayer to present compelling evidence showing that the assessor overvalued your property. Evidence can include and is not limited to a recent appraisal of your property, recent sales of similar property, and photos comparing neighboring properties to yours.
It is recommended that you attend an appeal hearing before the Local or County Board of Appeal and Equalization, but it is not mandatory. You can appeal by writing a letter of appeal to the board instead of appearing in person. You should include your daytime phone number in case the board has any follow-up questions for you.
Appeal the decision
You can appeal decisions by the Local or County Board of Appeal and Equalization to the Minnesota Tax Court.
Property Tax Information for Minnesota Counties
The table below provides county-level information about how property taxes work in each Minnesota county.
Want to learn more? Click the county links to learn more about a specific Minnesota county.
|County||Average Home Value||Average Tax Bill||Bill per $1,000|
|Big Stone County||$136,864||$1,310||$9.60|
|Blue Earth County||$177,314||$1,791||$10.10|
|Crow Wing County||$233,783||$1,709||$7.30|
|Lac qui Parle County||$117,258||$1,115||$9.50|
|Lake of the Woods County||$134,263||$1,296||$9.70|
|Le Sueur County||$205,446||$2,081||$10.10|
|Mille Lacs County||$160,469||$1,737||$10.80|
|Otter Tail County||$195,088||$1,530||$7.80|
|Red Lake County||$113,033||$1,247||$11.00|
|St. Louis County||$169,967||$1,612||$9.50|
|Yellow Medicine County||$139,788||$1,366||$9.80|