Commonly used terms
Abatement – An administrative method of correcting errors in valuation or classification that may escape the review process.
Assessment – The accurate and equitable valuation and classification of property to determine its market value.
Assessment Date – A date determined by law, January 2, on which the City of Minneapolis Assessor’s Office determines market value and classification.
Classification – Classification provides for different types of property to be taxed at different rates. These rates determine a property’s net tax capacity, which is the basis for most property taxes. Your property’s classification is determined based on its use and ownership.
Current Tax Year – Year in which property taxes are payable.
Disabled Veterans Homestead Market Value Exclusion - Qualifying disabled veterans may be eligible for a market value exclusion on their homestead property. (Minimum 70% disability is required.)
Disaster Credit – A reduction of taxes on property that has been accidentally or unintentionally damaged due to a disaster that renders property uninhabitable or unusable, and the damage is at least fifty percent of the structure value.
Estimated Market Value (EMV) – This value is what the assessor estimates your property would likely sell for on the open market. State law requires assessors to value property at 100% of market value.
Exemption – All real and personal property in the state is taxable, except property declared to be exempt by federal or state law. Common examples of exempt property include schools, church property, and federal, state and local public property.
Homestead – A classification that reduces the taxable market value on owner-occupied and some relative-occupied homes of Minnesota residents to encourage home ownership. Classification as a homestead may qualify a property for a homestead credit refund, market value exclusion and/or other special programs.
Homestead Market Value Exclusion - This applies to residential homesteads. The exclusion is a maximum of $30,400 at $76,000 of market value, and then decreases by nine percent for value over $76,000. The exclusion phases out for properties at $413,800 or more.
Homestead "Special" Classifications – A property tax class for people who are blind, disabled, paraplegic veterans and some people in the military service.
Levy – A property tax levy is the amount of property taxes collected by a county, city, school district or other unit of government.
Levy Limit – A restriction on the amount of property taxes a local unit of government can collect for certain services.
Local Government Aid (LGA) – A payment to cities from the state of Minnesota to help cover the costs of city services and thereby lower the amount the city needs to collect from property taxes.
Local Government Levies – Each year, local government entities in Hennepin County (Minneapolis, Hennepin County, the Minneapolis School District, etc.) decide on a budget amount for the following year and how much of that budget will come from property owners in the form of property taxes. Each taxing entity charges, or levies, an amount that is spread over the tax base for that taxing entity.
Local Tax Rate – The tax rate usually expressed as a percentage of tax capacity used to determine the property tax due on property.
Market Value – The price that could be obtained if a property were sold under competitive, open-market conditions. Assessors are required to value your property at 100% of market value.
New Improvements - This is the assessor’s estimate of the value of new or previously unassessed improvements made to your property.
Personal Property – Anything that is not real property is personal property. The main characteristic of personal property is that it is movable without causing damage to itself or the real estate. In Minnesota, personal property is generally exempt, but there are some exceptions. Taxable personal property includes certain utility systems, railroad docks and wharves, certain manufactured homes, and flight property.
Property Tax – A tax levied on any kind of property.
Property Tax Refund Program – This program gives property tax relief directly to qualifying homeowners and renters whose property taxes are high relative to their incomes.
Property Tax Statement – The Property Tax Statement is your tax bill. The county treasurer mails these statements to property owners by March 31 each year. Tax payments are due to your county on May 15 and October 15, for most properties.
Real Property – For the purposes of taxation, real property includes the land, all buildings, structures, improvements, or other fixtures on it, and the right to occupy the real estate, sell it, lease it, enter it, give it away, or borrow against it.
Referenda – A ballot question in an election where voters can approve or deny property tax increases. Voters in Minneapolis might have approved a property tax increase to buy land dedicated to future city parks, fire stations, libraries or other municipal buildings. Voters in a school district might approve a property tax increase in order to provide more funds to schools for operational costs or to build more schools.
Sales Ratio Study – This annual Department of Revenue study looks at property sales across Minnesota to ensure that local assessments adequately reflect the market and are relatively uniform statewide. The study is also used to adjust tax bases to allocate school levies and state aids.
Special Taxing Districts – Special taxing districts can raise revenue through the property tax, just like local units of government. Examples of special taxing districts are local watersheds, transit authorities, and regional public libraries.
State General Property Tax (Levy) – The state general levy is spread statewide. Ninety-five percent of the levy is paid by commercial and industrial property and five percent is paid by cabin property.
Tax Capacity – A calculation of your share of property taxes based on market value and class rates.
Tax Capacity Rate – The "tax capacity rate" is a result of dividing the property tax levies submitted by the taxing authorities (school district, county, city/township, metropolitan authorities, etc.), by the overall/total tax capacity value for that taxing jurisdiction.
Tax Capacity Value – The "tax capacity value" is determined by multiplying the market value of the property by the statutory percentage rates (also called class rates) for the specific classification(s)/use(s) on the property. Minnesota has many class rates and those rates can be changed only by the State Legislature. Contact the City of Minneapolis Assessor’s Office for a list of the current class rates.
Tax Increment Financing (TIF) – TIF is a method of financing real estate development costs to promote development, redevelopment and housing in areas where it would not otherwise occur. TIF Authorities use TIF revenues to encourage developers to invest in new projects, such as constructing new buildings, cleaning polluted areas, or paying for public improvements like streets and sidewalks.
Taxable Market Value – This is the value that your property taxes are actually based on, after any deferrals, exemptions or exclusions. Your current value, along with the class rate and the budgets of your local government, will determine how much you will pay in taxes in the next tax year. Remember: your property is assessed in one year and taxed in the following year.
Truth-in-Taxation (TNT) Notice – The county treasurer mails this notice to property owners in November each year (for the next years property taxes). It describes how your property taxes will change if all of the local taxing entities (county, city, school district, etc.) approve their proposed budgets. It also lists public hearings at which you can voice your concerns about those budgets.
Valuation – The process of determining the value of the property based on local market conditions.
Valuation Notice – The assessor mails this notice to property owners in March or April each year. It contains important information about your property and its value, and who to contact if you disagree with that value.