Minnesota statute defines "market value" as "the usual selling price . . . at the time of assessment". 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 knowledgeable, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue pressures.
Property values change continuously with fluctuating economic conditions. In addition to market changes, numerous physical changes affect the value of land and buildings. All factors are considered in estimating the value of property. This requires physical inspection of all property subject to assessment.
State statute requires the Assessor's Office to revalue all property every year to reflect real estate market conditions. The Assessor's Office is required to make sure assessment values are between 90% and 105% of actual market value.
In addition, Minnesota state statute requires properties to be physically reviewed at least once every five years. This does not include other visits for new construction, alterations, or improvements that will be viewed in the current year. Viewing the interior of the property is important in determining the quality and condition of each property, as well as documenting amenities and helping to determine the use of the property.
The Assessor's Office estimates market value and classifies more than 29,000 residential, agricultural, and commercial parcels each year for property tax purposes. The estimate of market value is as of January 2 of each year for taxes payable in the following year (Example: January 2, 2018, estimated market value is established for taxes payable in 2019).
The Assessor's Office determines the classification, or use, of each parcel. For instance, the property may be residential homestead (owner-occupied), residential non-homestead, apartment, or commercial. Each classification is taxed at a different percentage of market value as set by state statutes.
Each year there are a number of steps followed in order to determine an estimated market value and the classification of property.
Appraisal staff attempt to view the interior and exterior of your property to collect property characteristics used in the value and classification of real estate — established on January 2 each year. All items that have an impact on market value, such as size, age, quality, basement finish, and extra features, such as fireplaces, walkout basements, etc. are listed. The Assessor’s Office works throughout the year to estimate the market value of each property for the following January 2 assessment.
Any property that had a building permit issued is viewed and its new value is estimated for January 2 following the construction.
Appraisal staff attempt to view the interior and exterior of your property to collect property characteristics used in estimating market value. They list all items that have an impact on market value, such as size, age, quality, basement finish, and extra features, such as fireplaces, walkout basements, etc.
The property characteristics and actual sales information are entered into a mass appraisal system. An estimate of market value is computed based on this information and reviewed by a county appraiser. The estimated market value should be close to the amount the property would sell for if placed on the open market.
Each year the Assessor analyzes all sales of property in each jurisdiction. Sales in 12 months before the January 2nd assessment date, (from October 1 to September 30) are reviewed to find out what properties have sold for on the open market. These sales are used, as a guide to help determine what similar properties would likely sell for if they were placed on the market.
The State Board of Equalization requires the overall ‘level of assessment’ to be between 90-105% of market value. Goodhue County consistently meets the State Board’s requirements.
The Assessor’s Office mails a Value and Classification Notice to each property owner in March of each year. The estimated market value established on January 2nd of each year forms the basis for the following year's tax. For example, the value and classification on January 2, 2017, affect the taxes payable in 2018.
If you feel your valuation and property classification are correct, it is not necessary to contact your assessor.
