Who comes up with the value which then determines your property taxes?
In Dodge County the County Assessor’s office is responsible for classifying and valuing almost 12,000 parcels of property with a total market value of about $3.6 billion. That is broken down to about 56 percent in agricultural land, about 39 percent in residential properties, about 1 percent in apartments and mobile home parks, and about 4 percent in commercial and industrial land.
Minnesota state law requires that every county assessor classifies and estimates the market value of all property in the county as of Jan. 2 every year, except for, of course, exempt property and state assessed property.
The Estimated Market Value is defined as follows.
“It is the price that would tend to prevail under typical, competitive, open-market conditions, or also described as in an “arms-length transaction.”
Staff members of the county assessor’s office monitor real estate sales throughout the county throughout the year. The sale prices of properties in your town or township thus affect the estimated market value of your property. Even though you may not have made any improvements to your property, its estimated market value can go up based on how it compares to recently sold properties that are nearby.
State statutes also require that county assessors physically inspect (view on-site and in-person) properties at least once every five years. This is called the ‘quintile’ assessment process. These inspections can also change the assessed value of a property.
And finally, the new valuation of properties must fall between 90 and 105 percent of actual market value for properties sold in the area.
So, whatever amount similar properties sold for in the area of your property, your property must be valued for at least 90 percent of that price but less than 105 percent of that price.
Property is also classified according to, “its most probable, highest and best use.”
The most common classifications include residential, apartments, commercial/industrial, and agricultural. A property can also be ‘split-classed’ if it has more than one owner or use.
These are the basic steps that are required to assess the value of property. The actual procedures are much more complex and require sophisticated computer models to analyze and keep records of the properties under the jurisdiction of each county.
These valuations then will become the information used to create the Valuation Notices and Property Tax Statements that are mailed to property owners in the spring.