Buying a home is a long-term financial endeavor. In addition to likely paying a 15 or 30-year mortgage loan, Minnesota homeowners must also contend with other property-related expenses, including property taxes. In some cases, these taxes can be a significant amount, which is why owners often want to ensure that they are paying the right amount, particularly because that amount can change over time.
In order to determine the applicable amount of property tax, an assessor completes a tax assessment of the property. Various assessment methods exist, including:
- A sales comparison, which compares the sale values of properties with similar characteristics
- The replacement method, which determines the amount it would cost to fully replace a building based on recent market rates
- The income method, which determines an estimate of the amount of income that the property could generate if it were used for generating revenue
The taxable value will determine how much of the property’s total value will face taxation. In some cases, exemptions exist that may help lower the amount. In general, factors relating to the specific locale of the property influence the valuation of the property and the amount of taxes owed.
No Minnesota homeowner wants to end up paying an unnecessary amount in property taxes. As a result, it may be wise to ensure that owners fully understand the type of assessment being used, any available exemptions and how to get the most favorable amount possible. In some cases, having the assistance of legal professionals experienced with real estate laws may prove useful in these scenarios.