Assessment Practices Review Panel - St. Louis County

Minnesota statute to physically visit each property at least once every five years. New
construction or demolition which requires a permit triggers an automatic review each
year. As part of the assessment the assessor looks for the quality of the construction;
condition of the property; building materials; and characteristics of amenities (land and
structures). Measurements and photos are taken for documentation.
Mass Appraisal and Equalization
Mass appraisal is the process of valuing a group of properties within a jurisdiction as of a
specific date. Each year the DoR and the county assessor review sales ratio studies for a
group of properties within a jurisdiction and apply any necessary valuation changes in a
uniform manner to bring the jurisdiction into State compliance.
Types of Values
The Minnesota property tax system requires the assessor to determine an estimated
market value for each taxable parcel on January 2nd of each year. This value may be
adjusted for the purpose of calculating tax capacity, thus resulting in two definitions of
market value:
- Estimated Market Value (EMV): Is the value determined by the assessor as the price
the property would likely sell for on the open market.
- Taxable Market Value (TMV): Is the amount of value that is actually used in
calculating property taxes. This can differ from EMV due to special property tax
programs the property may be involved in.
Classifying Properties
Property is classified according to its use on the assessment date – January 2 nd . The
Assessor determines the classification. The classification determines the property’s
exposure to the local tax rate (i.e., homesteads have less exposure than non-homesteads)
and determine the property’s tax capacity (Taxable Market Value x Classification Rate =
Tax Capacity). The table below displays the different classification rates.
Table 2.1: Property tax classification rates
Classification Tier Class Rate
Residential Homestead First $500,000
Over $500,000
1%
1.25%
Residential Non-Homestead First $500,000
Over $500,000
1%
1.25%
Seasonal Recreational
Residential
First $76,000
$76,000 - $500,000
Over $500,000
1%
1%
1.25%
Agricultural Homestead First $1,010,000
0.5%
Over $1,010,000
1%
Commercial/Industrial First $150,000
Over $150,000
Rural Vacant Land 1%
1.5%
2%
In addition to the local tax rate, Seasonal Recreational Residential (SRR) and
Commercial/Industrial properties are exposed to the state general tax. SRR properties are
exposed at 40% of their tax capacity up to $76,000 and 100% of their tax capacities for
everything over $76,000. Commercial/Industrial properties are exposed at 100% of their
tax capacities to the state general tax.
St. Louis County Assessment Practices Review Panel Draft Report February 2012 Page 11