1. Why did my taxes go up?
There are four main reasons why a property owner may see higher taxes one year to the next, the county reports. Factors are government spending. The property’s market value decreased at a lower rate than other properties. The property classification changed. If none of these things occurred, property taxes owed should not be more from one year to the next. The property’s market value increased at a higher rate than other properties. Crow Wing County reports it froze its spending last year, as did some other local governments in the county.
2. Why did my property value go down?
Property values are determined by examining actual sales of similar properties during the assessment period established by state law. For the 2011 assessment, this means property sales that occurred during the period between Oct. 1, 2009 and Sept. 30, 2010. Not all property decreased and some property decreased more than others based on the actual “arms length” sales that occurred during the assessment period, the county reported. By state law, foreclosure sales, as an example, are not used when determining values.
3. Why did my property value go up?
Based on actual sales of similar properties as noted above, or improvements made to the property since the previous assessment. State law requires the county to physically inspect all properties within a five year period — this is called the “quintile” because the county inspects 20 percent of the properties in the county each year to fulfill this requirement of state law.
Increases in valuations (or decreases) could result based on what the county learns from these physical inspections. The state may order the county to increase valuations if it doesn’t meet state requirements that values fall between 90 percent to 105 percent of actual sales. State law requires the county to “equalize” values, which means an increase (or decrease) in values may be necessary to establish equitable valuation countywide.
4. How is my property value determined?
Although counties perform the bulk of assessment work in Minnesota, the policies and procedures followed are determined by the Legislature. These laws and rules, in turn, are administered by the Department of Revenue in St. Paul. Minnesota law requires the value and classification of all real and personal property be established as of Jan. 2 each year.
A mass appraisal process is used for estimating market values. Information from all sales that occur within the county is collected and analyzed to determine market value. In one area the sales may indicate values need to decrease substantially and in another area there may be very little or no change in value. The county reports different types of property within the same area may show different value changes. Among the factors that can affect value are location, condition, size, and quality of the property compared to similar properties sold during the assessment period.
5. How is my tax rate determined?
The spending decisions of local governments determine whether tax rates go up or down. For example, if the assessed value of all properties in the Crow Wing County went down equally by 10 percent, property taxes could still be higher if the budgets of local governments were higher.
Conversely, all property values could increase by 10 percent and taxes could go down if government spending was lower. The assessment of property to determine value and the establishment of the tax rate applied to properties are two very distinct and separate functions, the county reports. Assessment valuations are determined without regard to tax rates, but according to comparable sales. The tax rate is determined at a later point, based upon the level of spending approved by local elected officials at the county, city, and township and school district levels.
Local units of government determine how much they need to run their operation — values are used to determine how big a share of that spending each person will have to pay. Paying property taxes is like slicing a pie, the county reports and government spending is the pie. The county reported the value of each property determines how big a slice of that pie each property owner pays in taxes.
Source: Crow Wing County.
