Glossary: Definitions of Assessor's Office Terms
Abatement – A written request to lower the market value, penalties or interest or to change a property classification.
Assessment – The accurate and equitable valuing and classification of real estate property or parcels to determine the real estate property’s market value and thus establishing the tax base.
Assessment Date – A date determined by law, January 2 nd, on which the City of Minneapolis Assessor’s Office determines market value and classification.
Classification – Is determined based on type and use of the property for tax purposes. Some examples are residential homestead, residential non-homestead, seasonal recreational, commercial, exempt, apartment, industrial, utilities, etc.
Current Tax Year – Year in which property taxes are payable.
Disaster Credit – A reduction of taxes on property that has been accidentally or unintentionally damaged due to a disaster that renders property uninhabitable or unusable and the damage is at least fifty percent of the structure value.
Estimated Market Value (EMV) – This value is what the assessor estimates your property would likely sell for on the open market. State law requires assessors to value property at 100% of market value.
Homestead – A property tax reduction program open to Minnesota residents. The State of Minnesota encourages home ownership by providing owner-occupied and qualifying relative properties a reduction in their property taxes. For example, the homestead classification can reduce the taxes on a single family residence up to $304 per year.
Homestead "Special" Classifications – A property tax reduction program for people who are blind, disabled, paraplegic veterans and some people in the military service.
Levy – The imposition of a tax, usually by a local unit of government.
Levy Limit – The amount a local unit of government is permitted to collect for specific services.
Limited Market Value (LMV) - The Limited Market Value is designed to protect property owners from large jumps in property taxes from year to year that are a result of valuation increases due to a particularly healthy real estate market. LMV includes agricultural, residential, timberland, or noncommercial seasonal recreational residential (cabins). Current LMV is scheduled to be phased out as follows:
Local Government Aid (LGA) – This is a payment from the State of Minnesota to cities and counties that help "buy down" property taxes.
Local Government Levies – Each year, local government entities in Hennepin County (Minneapolis, Hennepin County, the Minneapolis School District, etc.) decide on a budget amount for the following year and how much of that budget will come from property owners in the form of property taxes. Each taxing entity charges, or levies, an amount that is spread over the tax base for that taxing entity.
Local Tax Rate – the tax rate usually expressed as a percentage of tax capacity used to determine the property tax due on property.
Market Value – Market value is defined as the price that could be obtained at a private sale or an auction sale, if the assessor determines the price from an auction sale represents an arms-length transaction. The price obtained at a forced sale shall not be considered. In other words: Market value is the price that would prevail under competitive open-market conditions.
Property Tax – A tax levied on any kind of property.
Property Tax Refund Program – The property tax refund program provides a refund to property owners who meet certain financial guidelines. The program won't lower your property taxes, but may mean you can receive a refund from the State of Minnesota if your income is low relative to your property taxes.
Property Tax Statement – The Property Tax Statement is your actual tax bill. It is mailed by the end of March, to the owner of record, as listed on the Tax Roll, as of January 2 nd. Tax payments on are due on May 15 and October 15 for most properties.
Proposed Property Tax Statement – or often referred to as the Truth-in-Taxation Statement – how your property taxes will change if all of the local taxing entities approve their proposed budgets. This is sent after November 10th and before November 25 th
Referenda – A ballot question in an election where voters can approve or deny property tax increases. Voters in Minneapolis might have approved a property tax increase to buy land dedicated to future city parks, fire stations, libraries or other municipal buildings. Voters in a school district might approve a property tax increase in order to provide more funds to schools for operational costs or to build more schools.
Sales Ratio Study – A MN Department of Revenue conducted study of open market property sales, which is then compared to local assessments to ensure that local assessments adequately reflect the market.
Sales Tax – A tax levied on the sale of goods and services.
Special Taxing Districts – Besides local governments, other special taxing authorities have the power to raise operating revenue through the property tax. In Hennepin County, these special taxing districts could include the Metropolitan Council, the Metropolitan Mosquito Control District, or a local watershed.
Tax Capacity – A calculation of your share of property taxes based on market value and class rates.
Tax Levy – The total amount of dollars that government entities need from taxpayers to provide programs and services next year.
Tax Capacity Value – "Tax Capacity Value" is determined by multiplying the market value of the property by the statutory percentage rates (also called class rates) for the specific classification(s)/use(s) on the property. Minnesota has many class rates and those rates can be changed only by the State Legislature. Call the City Assessor’s Office for a list of the current class rates.
Example: the class rate for homestead property is significantly less than the class rate for commercial or industrial property. The classification of a parcel determines what percentages are to be used to determine the total tax capacity of each property.
Tax Capacity Rate – The "tax capacity rate" is a result of dividing the property tax levies submitted by the taxing authorities (school district, county, city/township, metropolitan authorities, etc.), by the overall/total tax capacity value for that taxing jurisdiction.
A separate tax capacity rate applies to commercial/industrial/utility property because of the fiscal disparities (tax sharing program in the seven county metropolitan areas). Contact the City Assessor’s Office for information on the fiscal disparities program. Commercial/Industrial properties also pay a statewide general property tax.
Taxable Market Value – This is the value that your property taxes are actually based on, after all the reductions, limitations and deferrals. Your current value, along with the class rate and the budgets of your local government, will determine how much you will pay in taxes in next tax year. Remember: your property is assessed in one year and taxed in the next year.
Valuation – The process of determining the value of the property based on local market conditions.
Valuation Notice – or Notice of Valuation and Classification - This notice is mailed to property owners in first quarter of each year. This notice is not a bill, but a document that contains important information about your property and its value, which will be used to determine your taxes.
Value of New Improvements – This is the assessor's estimate of the value of the new improvements you have made to your property in the last year. New improvements are not eligible for limited market value restrictions.
Last updated Apr. 17, 2014