Tuesday, December 29, 2009

Do Lower 2010 Assessments mean Lower Property Taxes?

March 29th, 2009

Do Lower 2010 Assessments mean Lower Property Taxes?

My friend has a commercial building that houses his business. With property
taxes exceeding $100,000 for 2009, he asked me to accompany him when he met
with the assessor.

He then got his value notification for 2010 and his value went down 17%.

I ran into the assessor and told him my friend was pleased with the 17%
reduction. And the assessor replied "all the commercial buildings in that
area went down 17%".

So what does this 17% across the board reduction mean for the actual
property tax? Its too early too tell, but it may not reduce the taxes at

Think about property taxes as a pie. That pie is baked by the County, the
School District, the City, and don't forget about the folks at the Mosquito
Control District. These folks each determine there budgets which translate
into this property tax pie.

The assessors jobs is to divide up the property tax pie into slices that
determine how much tax each property owner pays. But there are many other
factors that influence your property tax. Voter approved referendums. The
Minnesota Legislature, like the Green Acres Amendment from last year. How
your neighbors' properties are valued.

So when you challenge your property tax assessment you're saying, in effect,
my slice of the pie is too big: make my slice smaller and my neighbors
should be bigger. Challenging your property tax assessment does NOT change
the size of the pie-only the size of the slices.

Given all other factors stay the same, what happens to property taxes when
all values are reduced 17%? NOTHING.

So don't let a reduced 2010 valuation deter you from appealing your 2009
property tax assessment---your 2009 taxes have NOTHING to do with your 2010

And your 2010 valuation, even if reduced, may still be too high. Especially
if the value is based on the assessor not understanding your land. Issues
I'm seeing in my land appeals include cases where properties had final plats
recorded for new lots, but the lots don't have all of the roads and
utilities in. I've seen this in 3 counties so far.

The biggest overvalue I'm seeing are in development Outlots that are future
phases. Its not uncommon for me to see these valued more than DOUBLE what
the data supports.

You're running out of time to appeal your 2009 tax assessment-April 30th is
the last day to have filed. Unsure if your values are too high? For 2009 or

Send me your property location and PIDs and I'll do free quick analysis for