Understanding Property Tax

Each year, local governments set a levy (budget) and determine how much money must be raised by property tax revenue to cover their spending after accounting for other revenues. The value and classification of your property are used to determine your share of the levy.

Property Tax Value

The county assessor determines the estimated market value (EMV) and classification of your property by January 2 each year. The EMV is adjusted for any deferments, exclusions, or reductions to determine the taxable market value (TMV) of your home.

Property Classification

The county assessor classifies your property based on its primary use, such as homestead, apartment, cabin. Each classification is taxed at a different class rate determined by Minnesota law.

Appealing Value and Classification

If you believe your property value or classification is incorrect, visit Appealing Property Value and Classification.

Most property taxes are due in two equal installments on May 15 and October 15. If your total tax due is $100 or less, it is due in full on May 15. 

If your property is classified as agricultural, the second payment is due November 15. 

Each year, you will receive two documents about your property tax.

Truth in Taxation notices are sent to all property owners in November, before local governments finalize their budgets for the coming year. The notice explains how property taxes are determined and how to get involved with local budgeting and taxation. It includes information about your property’s:

• Value and classification
• Tax amounts for the current year
• Proposed estimated taxes for the coming year

Property tax statements are mailed to all property owners by March 31. The statement includes:

• How much property tax you owe for the year
• An itemized list of your local property taxes (city or town, county, school district, etc.)
• Any special assessments on your property, such as special assessments for road improvements.

Note: Your property’s value and classification from the previous year are used to calculate the tax amount. You cannot appeal your tax amount.

In its simplest form, the yearly tax due for each property mainly depends on:

• Local budget and tax calculations
• Value and use (classification) of the property
• Tax credits or programs that may reduce the tax due
• Additional school or state property taxes that apply to certain properties

The full calculation can be complex. This overview explains the broad calculations and formulas. Contact your county assessor if you have questions specific to your property.

Local Tax and Calculations

Local and county officials calculate how much money they need to raise from property taxes and their resulting local tax rate.

Step 1: Towns, cities, schools, and counties calculate how much property tax revenue is needed, known as the Local Tax Levy:

Total Proposed Local Budget - Non-Property Tax Revenue = Local Tax Levy

Step 2: The levy is spread among all taxable properties according to their Tax Capacity:

Taxable Market Value X Classification Rate = Tax Capacity

Step 3: The levy and total tax capacity (for all properties) are used to calculate the Local Tax Rate:

Local Tax Levy / Total Tax Capacity = Local Tax Rate

Step 4: For each property, the county auditor determines if any tax credits or additional taxes apply:

• Property Tax Credits (for certain types of properties or programs)
• Referendum Levies (additional school levies approved by voters)
• State General Tax (additional state levy on certain types of property)

Property Tax Formula

The county auditor determines the tax due for each property using this basic formula:

1. Taxable Market Value X Class Rate = Tax Capacity
2. Tax Capacity X Local Tax Rates = Base Tax
3. Base Tax - Credits + Referendum Levy and State General Tax = Property Tax Due