Legislation passed in 2001—the Sustainable Forest Incentive Act (SFIA)—allows annual payments to be made to enrolled owners of forested land as an incentive to practice long-term sustainable forest management. To enroll in the sustainable forest incentive program, you must meet all of the following requirements: You own 20 or more contiguous acres of land in
Minnesota property tax law is governed by state statute, interpreted by the courts, and administered by the county. The Property Tax Division of the Minnesota Department of Revenue oversees each county. The Individual Income Tax Division of the Minnesota Department of Revenue is responsible for processing property tax refunds.
Minnesota property tax law involves the following legal areas and concepts.
Estimated market value
The assessor determines each property’s estimated market value based on sales of comparable properties, cost of construction minus depreciation, income generated by the property (if applicable), and other relevant available information.
Market value exclusions, taxable market value
For some properties, a portion of the market value is excluded from taxation. All homesteads with an estimated market value below $413,800 have a portion of the market value excluded under the homestead market value exclusion. Other market value exclusions are provided through the “Green Acres” program and the disabled veteran’s exclusion. A property’s taxable market value is its estimated market value less any applicable market value exclusions.
Net tax capacity, class rate
A property’s net tax capacity is determined by multiplying the property’s taxable market value by the relevant class rate or rates. Class rates are set by statute, vary by property type, and are uniform statewide.
Local taxing jurisdiction
A local taxing jurisdiction is any local unit of government that has the authority to levy property taxes. Examples are counties, school districts, cities, towns, and “special taxing districts” such as watershed districts, housing and redevelopment authorities, and regional development commissions.
Taxable net tax capacity
A taxing jurisdiction’s taxable net tax capacity is the total net tax capacity of all properties within the jurisdiction, excluding property located in a tax increment financing district.
Levy, levy limit
Each local taxing jurisdiction certifies a levy equal to the amount it intends to raise from property taxes in the upcoming year. For some local taxing jurisdictions, the levy may be constrained by state-imposed levy limits.
Local tax rate, total local tax rate
The local tax rate of a taxing jurisdiction is determined by dividing the jurisdiction’s levy by the jurisdiction’s taxable net tax capacity. The total local tax rate for an individual property is the sum of the local tax rates of all taxing jurisdictions in which the property is located.
Market value levy and tax rate
Most voter-approved levies apply to the property’s market value rather than its net tax capacity. The market value tax rate is determined by dividing the jurisdiction’s market value levy by the total market value of all properties within the jurisdiction (excluding properties classified as agricultural or seasonal-recreational, since those property types are exempt from market value levies).
Gross tax, property tax credits, net tax
Property tax credits reduce the gross tax that would otherwise be due upon a property. The most common property tax credits are the agricultural market value credit, the taconite homestead credit, and the disparity reduction credit. The remaining amount after subtraction of property tax credits is the net tax.
Class C2 Managed Forest Land: Minnesota Property Tax
This property classification, enacted in 2008, provides a reduced class rate of 0.65 percent to forested property that is subject to a current forest management (stewardship) plan and that meets other requirements. There is no minimum term of enrollment; property will receive the reduced class rate as long as it is enrolled and continues to
Rural Preserve Property Tax Program: Minnesota Property Tax
The Rural Preserve Program provides property tax relief for qualifying owners of rural vacant land in areas where the market value of the land is being affected by development pressure, sales of recreational land or other factors. The Rural Preserve Program This fact sheet provides information to property owners regarding the eligibility requirements for the
Green Acres (Minnesota Agricultural Property Tax Law): Minnesota Property Tax
The Green Acres Program provides property tax relief for owners of agricultural property in areas where the market value of land is being affected by development pressure, sales of recreational land, or other non-agricultural factors. Green Acres (Minnesota Agricultural Property Tax Law) This fact sheet provides information to property owners who currently have land enrolled
Special Agricultural Homestead Property Held Under a Trust: Minnesota Property Tax
The Special Agricultural Homestead provision extends homestead status to property that is owned under a trust and farmed by the grantor, the spouse of the grantor, or a child, sibling, grandchild, or parent of the grantor or the grantor’s spouse who do not live on the farm. Homestead status mayresult in less property taxes than
Special Agricultural Homestead Property Owned or Leased by a Qualified Entity: Minnesota Property Tax
The Special Agricultural Homestead provision extends homestead status to farms owned or leased by a qualified entity and farmed by a member of the entity who does not live on the farm. Homestead status may result in lower property taxes than property that is not homesteaded. What is a "qualified entity"? A qualified entity is
Special Agricultural Homestead: Minnesota Property Tax
The Special Agricultural Homestead provision extends homestead status to property owners who do not live on their farm but actively farm their land or who have a spouse or a child who actively farms the land. Homestead status can result in lower property taxes than property that is not homesteaded. If the land is rented,
Senior Citizen Property Tax Deferral: Minnesota Property Tax
The Senior Citizen Property Tax Deferral Program was established to help senior citizens who were having difficulty paying their property taxes. This deferral program has the following two primary advantages for senior citizens: It limits the maximum amount of property tax you pay to 3 percent of your total household income, and It provides predictability.
State General Levy: Minnesota Property Tax
Background During the 2001 legislative session, Minnesota enacted the first state property levy since taxes payable in 1967. The tax is only on certain properties and was enacted as part of a property tax reform law. Revenue from the tax is deposited in the state general fund. Is my property affected by state general tax?
My House is Worth What? Minnesota Property Tax
An appraisal is an estimate of property value based on historical data at a set point in time – January 2 of each year – and the market can change dramatically by the time the property is sold. For example, consider a property valued at $180,000 as of January 2, 2007. This assessment is based
Market Value Exclusion on Homestead Property of Disabled Veterans: Minnesota Property Tax
This program provides a market value exclusion for property tax purposes for the homestead property of an honorably discharged veteran who has a service-connected disability rating of 70 percent or higher, surviving spouses of qualifying veterans and service members, and primary family caregivers of qualifying veterans. What is the fair market exclusion? The program provides
Special Homestead Classification: Class 1b Minnesota Property Tax
Special Homestead Classification: Class 1b Special Homestead Classification: Class 1b provides a reduced class rate for qualifying blind/disabled property owners. Class 1b provides a reduced class rate for homestead property of any person who qualifies as blind or as permanently and totally disabled. The Class 1b blind/disabled homestead is different than other homesteads because the
Applying for the Homestead Classification: Minnesota Property Tax
The homestead classification applies to properties that are physically occupied by the owner(s) as the principal place of residence. Classification as a homestead may qualify the property for a reduced classification rate, a reduced taxable market value, a property tax refund, and/or other special program eligibility. A homestead classification qualifies your property for a classification
Understanding Your Assessment and the Appeals Process: Minnesota Property Tax
This fact sheet is the third in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts of their annual assessment and property tax administration. Please see Fact Sheets 12a and 12c for additional information. The assessor has an important role in the property tax process
How the Assessor Estimates Your Market Value: Minnesota Property Tax
This fact sheet is the second in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts of their annual assessment and property tax administration. Please see Fact Sheets 12a and 12c for additional information. Property Tax Assessment Process Minnesota has what is known as an
Understanding Property Taxes: Minnesota Property Tax
This fact sheet is the first in a series of three fact sheets that were designed to assist tax payers in the understanding of the basic concepts of their annual assessment and property tax administration. Please see Fact Sheets 12b and 12c for additional information. The money raised by property taxes is a major source
Appealing the Value or Classification of Your Property: Minnesota Property Tax
Each spring your county sends you a property tax bill. Three factors that affect your tax bill are: the amount your local governments (town, city, county, etc.) spend to provide services to your community, the estimated market value of your property, and the classification of your property (how it is used). The assessor determines the
Preparing an Appeal to Your Local Boards of Appeal and Equalization: Minnesota Property Tax
You have decided to appeal the valuation and/or classification of your property to your Local or County Boards of Appeal and Equalization. You must appeal to the Local Board of Appeal and Equalization before appealing to your County Board of Appeal and Equalization. If you haven’t done so already, you should contact your assessor’s office
Classification of Property: Minnesota Property Tax
In Minnesota, property is classified according to its use on the assessment date – January 2. If the property is not currently being used, it is classified according to its most probable, highest and best use. Highest and best use is the use that is financially feasible, physically possible, legally permissible, and maximally productive. There