This year, the April 30 deadline for filing property tax appeals falls on a Saturday. To ensure timely service and filing of tax petitions for our clients, we will be unable to accept property tax appeal cases for review, service and filing any later than Friday, April 22, 2011. Useful pointers concerning your property taxes:
- The property taxes that you pay in 2011 are based on an
assessed value established by the tax assessor as of January 2,
2010.
- Sometime in March, property owners will receive notices from
the tax assessor's office of the assessor's estimated
market value for their properties as of January 2, 2011. This
notice of estimated market value is part of the value-setting
process for next year's—that is pay
2012—property taxes. Under Minnesota law (Minn. Stat.
§ 273.01), assessors are allowed to make adjustments to
assessments until approximately mid-June of the year of
assessment.
- If you have questions or dispute the estimated market value,
consider taking advantage of this administrative adjustment window
between the time you receive your notice of estimated market value
in March and the assessor's deadline for making administrative
adjustments in June. Call the assessor's office and raise your
questions. You might succeed in convincing the assessor of changing
the estimated valuation if you have made a good case for the
adjustment.
- Remember: you cannot expect the assessor to lower your property
taxes; your assessor's authority is to set your property value,
so you can only lower your property taxes through the assessor by
seeking and obtaining relief in the form of a lower assessed value
for your property.
- Aside from informal communication with the assessor's
office, a more formal administrative process that is available is
the Board of Equalization. Your notice of estimated market value
should inform you when the Board of Equalization will meet for your
taxing jurisdiction. Beware of going blindly to a Board of
Equalization hearing without having discussed your concerns with
the assessor in advance. If the assessor is not receptive to a
reduction when you discuss your property in advance of the hearing,
our advice is: don't go. Be aware that this Board has the power
to raise, as well as lower your assessed value. An attorney tells
the story of advising his client not to go to the Board to seek a
reduction; the client went anyway and found his property's
assessed value of $13 million increased by the Board to
$15 million.
- Does it pay to file a property tax appeal? In most cases, it
does not pay to judicially challenge the assessed value to
residential property. Consider this, at a tax rate of between 1 to
2 percent, the tax savings achieved from reducing your home value
by $50,000 will amount to a $500 to $1,000 annual tax savings.
Given that the filing fee for tax court in Hennepin County is $325
and service of process fees run about $40, the costs alone will eat
up quite a bit of that tax savings. On the other hand,
commercial/industrial properties are taxed at a tax rate of between
3 and 4 percent. Given the higher-valued properties and the higher
tax rates, it is generally these types of properties that stand to
gain the most from challenging their assessed values.
- Larkin Hoffman provides a free property tax evaluation service for owners of commercial/industrial properties with assessed values of $2 million or more. Feel free to contact us for an evaluation.
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.
