Should You Appeal Your Property Tax Assessment?

DEADLINE TO FILE A PROPERTY TAX APPEAL IS APRIL 30, 2010. 
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As a property owner in Minnesota you contribute to your local government through your property tax payment. County and municipal assessors make efforts to tax your property fairly, but that is not always the end result. If your tax assessment is too high, your remedy is to file a petition appealing your property tax assessment in Minnesota Tax Court. While many assessors are open to negotiations, in some instances, pursuing your claim in tax court may be the only way to remedy an unfair tax assessment.

How is my property assessed and calculated?

To calculate the amount of your property taxes, county assessors generally rely on the Computer Assisted Mass Appraisal system, also known as CAMA. The property's fair market value is defined as the most likely price the property would capture in an open market during an arm's length transaction. County assessors can look at a variety of factors that distinguish your property from the next to determine its fair market value, such as the property's square footage, physical features, parking, etc.

Does the system treat landowners fairly?

The county assessor's ultimate objective is to obtain equalization. In other words, similarly situated properties should have similar values and be taxed at a similar rate. To ensure that happens, county assessors look to a yearly Minnesota Department of Revenue Sales Ratio Study to check the accuracy of the data compiled in the CAMA system. The yearly Sales Study evaluates the actual sales prices of all properties in the county and compares that data to what is in the CAMA system. The CAMA system data is then updated to be consistent with the local market sales. However, this system of checks and balances for determining a fair tax assessment does not always work.

What options do I have if an assessor contacts me directly?

Some assessors may contact you in an attempt to solicit information regarding any financial, appraisal or lease information you may have on your property. You are not required to provide any information to the assessor unless and until you have filed a property tax appeal. The adage that "no good deed goes unpunished" applies in the tax realm and any information you provide to the assessor may be used against you in determining the amount of your property taxes. The property tax valuation occurs on January 2 of each year.

What if I think my property tax assessment is too high?

You can appeal your property tax assessment to Minnesota Tax Court. As a matter of public policy the legislature intended the tax court system to be accessible to the public. The deadline to file a petition is on April 30th of the tax payable year. Once the appeal is filed, the case will then be heard in the county where the property is located. Assessors are generally encouraged to be available to landowners to discuss the basis of the assessment and when appropriate make adjustments to the assessment. 

What happens if negotiations fail?

When negotiations fail, the next step in the tax appeal process is the exchange of information, also known as discovery. The discovery process in tax court is unique from other types of litigation. When dealing with income producing property, the assessor is entitled by law to access a broad range of information regarding the property's value. Minnesota law requires landowners to produce certain financial information pertaining to the property's value within 60 days from the petition filing deadline. This information may include income and expense figures related to the property, lease information, expenses and rental information.

What happens if I do not comply with the 60-day deadline to produce information?

Failure to comply with the assessor's request for information within the 60 days could mean the end of your property tax appeal. The Minnesota Tax Court dismisses petitions for failure to comply with the 60-day deadline.

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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.