Think your property tax assessment is too high? Here's what to do

By now, Minnesota homeowners have likely received a "notice of valuation," a statement from your assessor's office used to determine how much you'll pay in property taxes next year.

Tony McGibbon bets there are plenty of people who will think that valuation is way too high but don't know that they can appeal it — or how to start the process. Years of double-digit home price gains complicate the valuations.

"It should be very well known what the process is," he said. "It shouldn't be so complicated that you just don't do it."

So McGibbon, a former assessor himself, recently launched a St. Paul-based company that helps homeowners determine whether an appeal might make sense. If so, for a fee, ProperTax will help navigate that process.

With the home price gains and a recent slowdown in sales, homeowners may not be sure what their houses are now worth. Hennepin County Assessor Joshua Hoogland, who oversees 39 jurisdictions in the county that don't have city assessors, said calls to his office more than tripled last year. (Bloomington, Brooklyn Park, Eden Prairie, Edina, Maple Grove, Minneapolis, Minnetonka and St. Louis Park handle their own assessments.)

"The residential value increases were pretty significant, and there was a significant concern that large value increases equated to large tax increases," Hoogland said. "We spent a lot of time explaining that it's not a direct correlation. That's not exactly how it works."

Already confused? We have some answers.

Why does my property assessment matter?

Your assessment is used to determine the value of your home for tax purposes, not necessarily what you could sell it for on the open market. The goal, according to the state, is to make sure that property owners pay their fair share of taxes, no more and no less.

How is my property's value assessed?

State law requires local governments across Minnesota to estimate the market value of all land and buildings as of Jan. 2 each year.

When determining that value, your city or county assessor takes a variety of factors into account, including: real estate market conditions, sales prices of similar properties, neighborhood location, and the size, quality and condition of the house.

"We're kind of historians, so we just follow what the market does," Ramsey County Assessor Patrick Chapman said.

The law also states assessors have to physically inspect each property at least once every five years.

When I bought my house I had an appraisal. Why is it different from my assessment?

They're not the same. An appraisal usually comes from someone who is hired to determine the value of an individual property for financing purposes. Assessments are from people the government hires for taxation purposes. While both are based on similar factors, the methodology is different.

How do property taxes in the Twin Cities compare with other metros?

LendingTree recently analyzed 2021 Census Bureau data on the median amount paid annually in each of the nation's 50 largest metros. The Twin Cities ranked at about the middle (27th) with a median tax bill of $3,507, which was a 6.9% increase from 2019 to 2021.

House prices are rising but my assessment went down. Is that a mistake?

Not necessarily. Valuations rise and fall depending on comparable sales around you. That can happen in spite of broader market trends. What matters is what's happening in your micromarket.

I don't pay my property taxes directly. Should I care?

Many people probably don't think much about their valuation because their property taxes are being escrowed by their mortgage servicers and are included in their monthly mortgage payments. But you should care. Your valuation doesn't change based on whether you have a mortgage or not.

How do I appeal my assessment?

The first thing you should do is contact your assessor.

"The lion's share of appeals or concerns are resolved over the phone, through an informal conversation with the assessor," Hoogland said. "We pride ourselves in being able to explain the process, help people understand how we got to our result."

Though processes can vary slightly by community, many will send assessors to reinspect properties. That visit can result in a value adjustment.

If you still think the valuation is unfair after the adjustment, or you aren't granted any adjustment, there are more steps you can take.

Throughout the month of April, many cities with assessors are holding local board of appeal and equalization meetings, where homeowners can plead their case. Other jurisdictions instead hold "open book" meetings, a more informal chance to discuss your valuation with an assessor.

Counties hold board of equalization and appeal meetings in June, but if you live in a city with a local board meeting, you must attend that first.

Be aware of deadlines. McGibbon said he started ProperTax to help people navigate these processes and decide whether it's worth it, based on the odds that your house might be overvalued.

"It's just a ton of properties to value," McGibbon said. "The assessors work hard. It's just not realistic to think they're going to be accurate on every house."

There's also one more path homeowners can pursue, though local assessors warned that it's often more costly and complicated: tax court. April 30 is the deadline to appeal your prior year's valuation there. Many people hire an attorney to help navigate that process. Before you do, you should try to determine whether the cost of hiring someone might be worth it.

Does an increased assessment mean my property tax bill will go up?

Not necessarily. For one, it depends on the property tax levies cities, counties, school boards and other taxing authorities set during their budgeting processes. The levy is the total amount a local government decides to collect in property taxes, not the amount an individual property owner pays.

Additionally, it depends what's going on in the rest of your community. If the market is hot, and everyone's home value goes up, then no homeowner will see a larger slice of the tax pie.

My property tax bill went up this year. Is there anything I can do about it?

Many local governments increased property tax levies for 2023. Some said they were making up for increases they postponed at the height of the COVID-19 pandemic, while others cited inflation and rising labor costs.

The state offers a few types of relief. Homeowners can qualify for the homestead credit refund if their 2022 household income was less than $128,280 or their property taxes increased more than 12% compared to last year.

There's also the homestead market value exclusion, which reduces the taxable market value — and, accordingly, property taxes — for all homesteads valued below $413,800. (Details of that exclusion are at revenue.state.mn.us/homestead.)

Higher home prices now mean fewer homeowners qualify for that exclusion, which is why state Rep. Matt Norris, DFL-Blaine, is the lead sponsor of a bill that would increase the cap for the first time since 2011 to $437,100.

Norris said while he was door-knocking during his 2022 campaign, he heard from Anoka County residents whose home values jumped 62% from 2014 to 2021.

"In particular, I was worried about our seniors who were on fixed incomes and looking to age in place in their homes," he said.