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What is Market Value?
The estimated market value should be the most probable sale price of a property in terms of money in a competitive and open market; assuming that a buyer and seller are acting prudently and knowledgeably; allowing sufficient time for the sale and assuming that the transaction is not affected by undue pressures. The Assessor’s Office works throughout the year to establish market values of each property as of January 2nd of each year for taxes payable the following year.
How does the Assessor Estimate Market Value?
The Ramsey County Assessor’s office uses a mass appraisal process for estimating market values. This system involves the analysis of sales that have taken place in the jurisdiction and the collection of the physical features of each property in the jurisdiction. The assessor also analyzes information on construction costs, how much it takes to operate and keep a property in good repair, what rent it may earn, and many other financial considerations affecting market value, such as the current rate of interest charged for borrowing money to buy or build properties like yours.
Using these facts, the assessor can then go about finding the property value in three different ways:
Sales Comparison Approach - The first approach the assessor uses compares your property to others that have sold recently. Each year the Assessor analyzes all sales of property in each jurisdiction. State law provides guidelines of sales to be used for assessment purposes. Only good sales, or arm's length transactions, are used in determining Estimated Market Value.
This approach compares the property characteristics of your property and compares them to the characteristics of the sold property; adjustments are made for differences to arrive at an estimate of what your property would sell for if placed on the open market.
Cost Approach - A second approach the assessor can use to value your property is based on how much money it would take, at current material and labor costs, to replace your property with a similar one. If your property is not new, the assessor depreciates the cost of constructing a new building to estimate the value of a building with your building’s age.
Income Approach - The third approach the assessor can use involves estimating how much income your property would produce if it were rented as an apartment house, a store, or a factory. The assessor considers operating expenses, typical vacancy, insurance, and maintenance costs to estimate how much net income your property could generate. The assessor compares this net income with how much income most people would expect to earn on other types of investments to estimate the value of your property.
After calculating the values using these three methods, the assessor makes a final judgment on the value of your property. Depending on the type and nature of your property, the assessor may rely more heavily on the value estimated by one approach, disregard the value estimated by one approach entirely, or try to combine the values suggested by the three approaches into one value.
Also see How is My Estimated Market Value Established?
Why has my Estimated Market Value Changed?
Property values are based on market values that fluctuate with general market conditions such as recent sale prices, supply and demand, demographic changes, and changes in tax laws. By Minnesota state law, as property values change in the market place, those changes must be reflected in the assessor’s estimated market values.
In addition to market changes, physical changes made to your property can also affect your market value. For example, if you were to add a garage to your home, the market value may increase. However, if your property is in poor repair, the market value may decrease over time. The assessor does not increase values due solely to routine maintenance.
In some areas, market conditions may have led to increases in market values without any physical changes to the property. Other areas may have experienced declines. All factors are considered in estimating the value of property.
Does the Estimated Market Value Change at the Same Rate on all Properties?
No, it does not. There are differences between individual properties and between neighborhoods. In one area the sales may indicate a large increase in value in a given year. In another neighborhood there may be very little or no change in value. Properties within the same neighborhood may show different value changes. There are numerous factors to be considered in each property, which will cause value changes to differ. Some of the factors that can affect value are location, condition, size, quality, number of baths, basement finish, garages, and many others. Property information may have been corrected resulting in an increase or decrease in value different than neighboring properties.
What will happen to my Estimated Market Value if I improve my property?
Generally speaking, improvements that increase the market value of a property will increase the assessor’s Estimated Market Value. The following are typical improvements that will increase the Estimated Market Value of your property:
Will my Estimated Market Value go up if I repair my property?
Not necessarily. Good maintenance will help retain the market value of your property, but generally will not lead to substantial value increases. Individual improvements such as those listed below will probably not result in any change in your property value.
Replacing water heater
Repairing or replacing roof
Repairing porches or steps
Repairing original siding
Replacing plumbing or electrical fixtures
However, a combination of several of these items could result in an increase in your Estimated Market Value.
Am I notified about my Estimated Market Value?
Yes. Ramsey County mails a Notice of Valuation and Classification in March of each year to each property owner.
What can I do if I think the current (2014 pay 2015) Estimated Market Value is too high or classification is incorrect?
You have the right to appeal the Estimated Market Value. See Important Appeal Information.
What can I do if I think the past (2013 payable 2014) Estimated Market Value is too high or classification is incorrect?
We are unable to address concerns with your 2013 Estimated Market Value at the open book meeting. An appeal of the 2013 value for taxes payable in 2014 must be directed through the Minnesota Tax Court. An appeal to the Minnesota Tax Court of your 2013 value must be filed by April 30, 2014.
How do I know I have taken advantage of all property tax relief?
MN Property Tax Refund
Minnesota has two property tax refund programs for homeowners: the regular property tax refund and the special property tax refund. You may be eligible for one or both, depending on your income and the size of your property tax bill.
The regular property tax refund, sometimes called the "circuit breaker", is based on your household income and the amount of property tax you pay on your principal place of residence.
The special or "targeting" property tax refund requires your net property tax to have increased by at least 12% and $100. The special property tax refund is not based on income.
Senior Citizens Property Tax Deferral Program
This program allows people 65 or older to defer a portion of their homestead property taxes and is also administered by the State of Minnesota.
For more information on these programs, see Refunds and Special Relief Programs.
Homestead is a program to reduce property taxes for owners who also occupy their home and are a Minnesota resident. You can qualify for this tax reduction if you own and occupy your house as your main place of residence or are a relative of an owner living in the owner's house.
Market Value Exclusion on Homestead Property of Disabled Veterans
This program provides full or partial valuation property tax exclusion for homesteads of disabled veterans with a disability rating of 70 percent or greater, as determined by the United States Department of Veteran Affairs.
Non-Profit Community Service Organizations
This program expands the 4c property classification for nonprofit community service-oriented organizations that make charitable contributions and donations at least equal to the organization's previous year's property taxes and that allow the property to be used for public and community meetings or events at no charge, as appropriate to the size of the facility.
What is a Quintile Review?
The assessor maintains records on the physical characteristics of each property in the County. The Assessor’s Office is required by State law to physically review your property at least once every five years and record any changes in property characteristics since their last visit. This review is part of an ongoing revaluation program to ensure the accuracy of our data and to assist us in estimating a fair and equitable value of your property for property tax purposes. This process is known as the quintile review. Reference (Minnesota Statutes, section 273.01)
Appraisal staff carries County Identification and will request permission to view the interior and exterior of your property. If you are not home we will complete an exterior inspection and a notice will be left on your front door notifying you of our visit with any further instructions such as a need for an interior review or verification of information.
Appraisal staff view the interior and exterior of your property to collect property characteristics used in estimating market value. The property characteristics such as year built, style, square footage, quality of construction, and condition are entered into a computerized mass appraisal system.
Will I be notified when my property is going to be reviewed?
No. Ramsey County does not mail a separate notice prior to these inspections. This property review will take 10 – 15 minutes and the appraiser will try to answer any questions that you may have. For more detail about the review, see above question: "What is a Quintile Review?"
What happens if I do not let the appraiser in my home?
Even though the assessor may have been unable to go through your property, the estimated market value will still be reviewed based on the updated and existing records of your property and sales of similar properties. In order to obtain a fair and equitable assessment, it is best for the appraiser to review the interior of your home. If an appraiser is unable to review the interior of your property he or she will make a value estimate. Any changes to assessed market value will require an interior inspection.
Have more or different questions?
Contact the Assessor's Office.