Appealing the Taxes You Pay on the Assessed Value of Your Property

By:  Lesley J. Adam

Every spring your county sends you a property tax bill.

Three factors that affect your tax bill are:

1. The amount your local governments (town, city, county, etc.) spend to provide services to your community;
2. The estimated market value of your property; and
3. The classification of your property (how it is used).

The assessor determines the last two factors. You may appeal the value or classification of your property.

Virtus Law, PLLC has successfully handled numerous property tax appeals involving disputes over the value, or the estimated fair market value, assessed to the property. Estimated fair market value is the amount the assessor estimates a buyer would pay for your property if it were offered for sale. Each year the assessor reviews the market valuation of your property to determine if changes in the real estate market or improvements to your property require a change in the estimated market value. The assessed fair market value is the amount you pay taxes on.

Once appealed, the assessor must make a more in depth analysis to determine the value. Generally, the Minnesota Supreme Courts recognizes three basic approaches to determining the value of real property:

1. The market value approach, which is based on the price paid in actual market transactions of comparable properties;
2. The cost approach, which is based on the proposition that an informed buyer would pay no more for the property than the cost of constructing new property having the same utility as the subject property; and
3. The income capitalization approach, which determines the value of income-producing property by capitalizing the income the property is expected to generate over one year or some other specified period at a specified capitalization or yield rate.

Additionally, in determining market value of real property for tax purposes, an appraiser must reconcile the value conclusions under at least two approaches to arrive at a final opinion of market value; the weight placed on each approach depends upon the facts of each case. Further, analysis could show that your property has been incorrectly assessed and lead to a reduction in the estimated fair market value and a real tax savings for you.

The deadline is quickly approaching: An appeal of the 2014 estimated fair market value can only be appealed through the Minnesota Tax Court, on or before April 30, 2015.

Contact our office before Friday, April 24 2015 to submit your property tax appeal information.