Do you think that your property's real estate tax assessed value is higher than the actual market value? Would you like to reduce your taxes and you believe there is a rational argument to do so? If this is the case, now is the time to get started. For property taxes for this year (that is, taxes payable in 2016), appeals must be filed and served by April 29, 2016.
The assessed value is set at the county level. It is an appraisal process, though different than the appraisal process used when a bank is lending money or an investor is considering purchasing a property.
The assessed value should generally reflect a rough measure of the property's actual market value. However, for various reasons, the assessed value may exceed the property's actual value. Generally, assessors try to give each individual property a reasoned review every five years. Between reviews, assessed valuations are typically based on assumptions about market conditions. This can result in discrepancies between assessed value and actual value.
There is a procedure for addressing this discrepancy. The procedure affords the property owner multiple chances to attempt to correct the assessed value.
In Minnesota, assessed value is set on January 2 of the year prior to the year in which taxes are actually paid. For example, for taxes payable in 2016, the assessed value was set on January 2, 2015.
Property owners receive mailed notice of their new assessed value in February or March. The first step for a property owner who feels the assessed value is inaccurate is to simply phone the assessor. In many cases valuation issues can be resolved informally with the assessor.
If this is not successful, in many communities, there is a local board of equalization or "open book" meeting that affords the property owner another opportunity to seek a reduction in value.
These processes vary by community. Information is typically contained with the notice of assessed value, or sometimes with the valuation and classification notice.
Property owners may also appear directly before the county board of equalization, which generally meets in June in most counties.
If the property owner does not participate in any of these processes, or if they do not result in an agreement to reduce the assessed value, the county board of equalization will ordinarily adopt the valuations suggested by the assessor. Once the board of equalization has adopted assessed values, the assessor loses discretion to change them.
If this occurs and the property owner still believes the assessed value is too high, the property owner still has recourse: file an appeal in tax court. Appeals must be filed and served by April 30 of the year in which the taxes are payable. The initial filing requirement is minimal, but for non-residential properties there is a supplemental submission that must be made within 90 days thereafter, consisting of a package of property information that must be submitted to the county.
For more information about filing tax appeals, contact experienced real estate counsel. For filings this year, counsel should be consulted no later than the end of March, 2016. It can take some time to gather the necessary information to prepare the filing, and the April 29th date is a hard deadline (that is, if it is missed, there is not a second chance).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
