Why Does the Assessor's Office Exist?
In Minnesota, property taxes provide most of the funding for local government services. Each property's share of the property tax burden is determined according to its VALUE and USE. The Assessor's Office gathers property data and updates the assessment records annually. The cost required to cover operating expenses of local governments is levied by each township, city, school district or county to pay for services required by local citizens. This translates into an annual property tax bill due and payable for each property in the county.
What is the responsibility of the Assessor in the property tax system?
County Assessor's estimate property market values and classify them according to their use for property tax purposes. Each year the assessor reviews the market valuation of your property to determine if changes in the real estate market require a change in the estimated market value. Minnesota law requires that assessors actually view each parcel of real estate every five years to appraise its market value. In addition, each year the appraiser inspects parcels with new construction or improvements.
What is the Property Identification Number (PIN)?
The PIN is a unique number assisgned to each parcel of real estate in the county. The PIN is printed on the Valuation Notice, the Tax Statement, Proposed Tax Statement and on other documents related to real estate assessment or taxation.
What is Estimated Market Value (EMV)?
Estimated Market Value is the most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after a reasonable exposure in a competetive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress. In other words, market value is the price that would tend to prevail under normal, typical, competetive open market conditions.
How is market value estimated?
The assessor visits your property to record the existence and character of improvements that contribute to its market value. The assessor collects sales information on all types of property, and studies characteristics such as size, age and location of the property. Local sales will impact local values. The assessor uses actual sales data of similar properties in your area to estimate what buyers would pay for your property. One sale does not establish the market. A trend must be established that indicates sales are having an impact on existing valuations.
Why does estimated market value increase?
Property values are based on the typical sales as prices fluctuate with general market conditions such as the economy, property locations, suppy and demand, demographic changes, new construction and changes in tax laws. Per Minnesota Statutes, as property values change in the market place, those changes must be reflected in the assessor's Estimated Market Values.
How does the Assessor determine Estimated Market Value?
The County Assessor's office uses a mass appraisal process for estimating market values. This system involves the comparisons between similar properties and actual market sales. All sales information collected by the Assessor's is closely analyzed. The Assessor's office adjusts market values by comparing properties that sold with properties that have not sold. This sales comparison by means of substitution provides the basis for the Assessor's Estimated Market Value.
Does the Estimated Market Value increase at the same rate on all properties?
No. There are differences between individual properties and between locations of properties. In one area the sales may indicated an increase in value in a given year. In another area, there may be very little or no change in value. Different types of property within the same area may show different valuation changes. There are numerous factors to be considered in each property, which will cause value changes to differ. Factors such as location, condition, size, quality of construction and craftsmanship, number of baths, basement finish and other amenities can affect values.
Why does the Estimated Market Value change even if the assessor has not been inside my home?
The Assessor keeps records on the physical characteristics of each property in the county. Even though the Assessor may not have viewed the interior of your property, the Estimated Market Value will still be reviewed based on the existing records and/or sales of similar property.
What will happen to my value if I make improvements to my property?
Generally speaking, improvements that increase the market value of a property will increase the Assessor's Estimated Market Value.
Will my Estimated Market Value go up if I make repairs to my property?
Regular maintenance will help retain the market value of your property. In most cases, the Estimated Market Value will not be increased for replacing a roof, painting/decorating, repairing steps, porches or decks, repairing siding, replacing plumbing or electrical fixtures.
What can I do if I think the Estimated Market Value is too high?
You are encouraged to first contact your Assessor's office and discuss the assessment with the appraiser who viewed your property. You have the right to appeal the Estimated Market Value. The various methods of appeal are listed on the back page of your Notice of Valuation and Classification that is mailed to each property owner in the Spring.
What factors affect my property taxes?
There are a number of items that affect your property taxes. The following items are those that traditionally have had the largest impact on your property tax bill: Changes to the tax levy, changes to the market value of your property, changes in market value for an area or a particular class of property, legislative changes, and unfunded mandates, referendums.
Who determines my property tax?
There are usually three entities that have a role in determining your property tax. The State Legislature establishes property classes and class rates, the state determines levels of state aid to local units of government, sets the amount of homestead credit, sets the State General Tax Rate and mandates unfunded programs to local government. Local units of government determine their tax levy amount. The County Assessor assigns each property a market value estimate and property use classification as provided by state statute. The property tax is the result of actions taken by all three entities. (State Legislature, Local Governments, and the County Assessor).
If property values are increasing, does this mean more tax dollars for Governmental units?
No. Governmental units must set a tax levy each year. A tax levy is the amount of money that the local government budgets (less any revenues or fees). The resulting dollar amount is collected by means of property tax. Increasing the tax levy is the only way that a governmental unit will receive more property tax dollars. If a local government doesn't increase its levy, property owner's may still see increases in property taxes for that local government if their property values are increasing faster than other property owners. Other property owners may see tax decreases. Property tax is flexible. It can be adjusted to control the flow of revenue. Because the unit of governemnt only receives what it levies, there is no surplus or deficit.
What is Classification?
Classification is a definition of how property is USED and is determined by ownership and use. Classifications such as residential, seasonal, commercial/industrial and agricultural describe the primary use of a property, and affect the amount of property tax paid. By state statute, various classes of property are taxed at different rates. For example, two homes of equal value will be taxed at different rates if one is homestead and one is non-homestead property. New homeowners should contact the County Assessor's office to apply for the homestead classification rate.
How can I judge the accuracy and fairness of my value and classification?
The Assessor who estimates the value and classifies your property should be your first contact if you have questions or want more information. If you are not sure who your appraiser is, call the Faribault County Assessor's office. Your appraiser can review your parcel records with you, review local sales activity and be able to provide you with the information on market trends in your area. You can also review how other properties are valued and classified to judge if your property is fairly valued and classified.
Who qualifies for Homestead?
To qualify for homestead, you must occupy the property as your primary residence or be a qualifying relative of the owner of the property and be a Minnesota resident.
What is a Special Assessment?
A special assessment is an improvement, which directly benefits the property. Common special assessments include streets, sidewalks, sewers, and drainage ditches. The amount if based on how much the property benefits from the improvement and the cost of the project. The property's market value is not used to determine the amount of the special assessment.
Are there programs available for disabled persons to reduce the amount of property tax due?
Yes. If you are a blind or disabled person or if you are a military veteran with disabilties, please contact the County Assessor's office and we will send you the necessary forms that need to be filled out and returned to the Assessor's office.
If you have a question that wasn't addressed in this section, please feel free to contact our office and we will be happy to answer any questions you may have.