Property Taxes. Truth in Taxation?

by Alex Stenback on November 23, 2004

If you haven’t yet received your Truth in Taxation statement you should see it arrive within the next few days. For most of us, the statement will contain little good news. If you missed this little gem[expired link, now in startribune.com's paid archives] a few days ago in the Star Tribune it is worth a read, because it has a lot to do with how much you will be paying in property taxes now and in the future.

The article deals primarily with a concept I have been talking about with my clients for a long time: Truth in Taxation, and, more specifically the Limited Market Value Program. There a lot of problems with these two programs that I think are worth addressing here, because they go to the root of what it really means to be truthful about when, how, by whom, and in what manner your property taxes are determined.

But first, a little history:

For as long as most of us can remember in Minnesota, there has been a big difference between a given property’s tax assessed value (the value determined by the county, which is used as a basis for calculating how much you pay in property taxes) and actual market value (what a buyer would pay for your home.) There’s a reason for this, and it isn’t that the folks assessing the value for the county don’t know what they are doing.

The reason is that under the Limited Market Value Program, there have been "caps" in place that limit the amount a property’s tax assessed value may increase from year to year, which also in effect has capped property tax increases. This is changing, and it will likely cost you.

The Limited Market Value Program is now in the third year of a five year phase out plan. This means that by 2007, your property taxes will be based on a "true" market value model, and will go up accordingly.

The problem is this: Most of the politicians will tell you they haven’t raised property taxes, or in some cases have even cut the property tax rates, which is true. Sort of. I mean, sure the tax rates haven’t gone up, but if the system by which we determine a property’s value has fundamentally changed, and because of that change higher property taxes result, it’s still a tax hike. Funny how that works isn’t it? It’s the worst kind of doublespeak: "We’re not raising your taxes, just making sure we assign the proper value to your property…and who could be against that?"

So, when you open up your Truth in Taxation statement this year – remember, just because it says Truth in Taxation, it doesn’t mean you are getting the whole story.

More Tax Stuff:

You can click here to find out where to go if you’d like to attend your county’s hearing on proposed property tax bills (most of them are scheduled for Dec 2nd)

Did you know that property tax information is a matter of public record, and that you can go to most metro county’s websites to get information on a particular property by just entering the address? In some cases you can even find out the most recent sale date and price, as well as the owner of records name? Here’s a list:

Dakota County
Hennepin County
Carver County
Anoka County
Wright County
Washington County
Scott County

And to wrap it up: The Minnesota Department of Revenue Property Tax Info Page

If anyone has any personal stories or feedback to share regarding how their property tax or assessed value has changed, please email me by clicking here, I’d be very interested in knowing how those of you out there feel about this shift in tax policy.

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