The answers below are intended to be simple and brief and may not fully address each question. Please contact the Aitkin County Assessor’s Office for additional information.
The Estimated Market Value (EMV) is what the assessor estimates your property would likely sell for on the open market. Minnesota Statute 272.03 Subdivision 8 defines market value as ‘the usual selling price at the place where the property to which the term is applied shall be at the time of assessment; being the price which could be obtained at a private sale or an auction sale, if it is determined by the assessor that the price from the auction sale represents an arm’s-length transaction. The price obtained at a forced sale shall not be considered.
The property tax classification usually refers to the use of the property as of the assessment date. Assessors are responsible for putting property tax classifications on all types of real estate. These classifications are set by State Statutes. In the case of vacant property that does not have a clear use, the classification is often the highest and best use of the property. This may mean that a vacant lot on a busy highway that is zoned commercial has a commercial tax classification. Classification for property tax purposes may be different than a zoning classification.
Both of these items are mailed out to all taxpayers on a form called the notice of valuation and classification. This form is yellow and located in the same envelope as your tax statement. These are mailed in March of each year. This information is also located on the Aitkin County website on the LINK parcel map. On the map, zoom into your parcel and click on your parcel using the identify icon at the top of the screen. Then, a box will appear on your screen showing information such as value and classification as well as tax amount and mailing address.
Mass appraisal is the process of valuing many properties using a standard method and common data. A CAMA system is Computer Aided Mass Appraisal which uses computers to implement this process. The CAMA system stores the many factors of value for each property and generates values for each property using models which replicate the actual market.
5. What is the difference between an assessor and an appraiser? Top
Assessors may be called appraisers in some areas and appraisers may be called assessors. In the Aitkin County Assessor’s Office, the appraiser is the person that physically views properties going through a standard process to value and classify properties for tax purposes. The appraiser is most familiar with the physical aspects of the properties that are assigned to them. The county assessor is the supervisor of the appraisers and is responsible to ensure the assessment of the county is accurate and complete.
The Estimated Market Value (EMV) doesn’t automatically go down because someone pays less than the County’s EMV. The EMV is set based on a group of sales and not a single sale, even if the sale is open market. When many properties in one area sell for more than the assessor’s value, then the assessor raises values. In property tax assessment, care is taken to treat similar properties equally so that owners are not paying an incorrect tax amount. Adjusting only one owner’s value could be unfair to other owners.
This is known as Rural Vacant Land. This classification is used for property that is not in a city or town and has no buildings, no agricultural use, and no commercial use. Often, this classification describes hunting land that is wooded or swamp.
Generally, assessors cannot use these types of sales to value property. In most cases they are not considered to be arm’s length, open market sales that are good indicators of the market. There may be exceptions to this, especially in markets where the majority of all sales are distressed sales. Also, Department of Revenue guidelines prevent assessors from using these sales.
9. Are a real estate agent’s listings used to value property for property tax purposes? Top
Sales listings may be useful indicators of market activity but assessors cannot directly use listings to value property. When a sales study is done, only open market sales are considered as true indicators of market value.
Appraisers from an assessor’s office will look at many things on an inspection since anything that affects value is important to note. They may ask to view the interior of the home. Homeowners are encouraged to allow appraisers to view the interior since assessors may make value assumptions on items they cannot see.
On a residential inspection, appraisers look at items including square footage of the exterior, exterior wall and roof condition and type, foundation type, window type and condition, interior wall and floor finish and type, number of bedrooms and bathrooms, basement finish, sidewall heights, presence of mold or water damage, floorplan of the house, heating/cooling system, and other items. The items that contribute to value can change over time. Valuation adjustments can be made based on certain items when sales have shown that those items affect value.
There are many factors that are considered to determine land value. For property that is not on water, the following items are often considered: size, elevation, wetlands, soil type, drainage, access to roads, proximity to development and tree cover. For lakeshore land, all of the factors listed above also can play a role in valuation. Special attention is paid to the condition and quality of land near the lake on these properties. The type of vegetation on the lakeshore, the type of lake bottom and the type/size of the beach is important.
12. How can my value change every year? Top
The market values can and often do change every year. Reassessments and physical inspections are conducted at least once every five years. The State of Minnesota requires that county assessors conduct a sales ratio study every year in every area of the county. These studies show if the market values are too high or too low. Assessors are then required to adjust values to comply with the findings of the study. If the county does not respond appropriately the study’s results, the county may be required by the State to increase or decrease values after the appeal meetings. State increases or decreases may not be appealed by the property owner.
Assessors may use three approaches or methods to value property. These are the cost approach, the sales comparison approach, and the income approach. The cost approach considers the cost to build and develop a property and then removes depreciation due to age and other factors. This method is usually more reliable on newer improvements.
The sales comparison approach utilizes sale prices of similar properties as a measurement of market value. This is often used in property tax assessment since it is an easily explainable and reliable way to show value, especially for residential and seasonal property.
The income approach converts the anticipated benefits of future income and sale of a property into a present value. This is most commonly used for commercial, industrial, and apartment property since income is a primary reason for ownership of these properties.
Income surveys are mailed to some property owners to help generate market rates, multipliers, and ratios for the income approach to value. Owners are not required to return the surveys but without the survey data, assumptions would need to be made to value the property. These assumptions may not be correct and result in values that are too high or too low. Income information returned to the assessor’s office is private data and kept in a secure location.
15. Why does my financing appraisal show a different value than the Estimated Market Value? Top
Appraisals prepared by a private fee appraiser are often limited to a specific end use such as mortgage financing or settlement of an estate. They are different in nature and subject to different rules than appraisals done by an assessor. The assessor’s office does not prepare narrative appraisals with specific comparable sales for every property in the county.
The effective date of assessor’s appraisals are January 2 of each year and the supporting sales information is taken from the sales study period during part of the two years prior to January 2. Specifically, the 2017 assessment values have an effective date of January 2, 2017. The sales to support these values occurred from October 2015 through September 2016.
For example, if your financing appraisal has an effective date of June 2016, it may reflect a market change that the assessor’s value does not reflect since it’s a newer appraisal.
The estimated market value for property tax purposes does not specifically include the value of timber, crops, or any personal property. However, in the case of timber, the valuation of the land is split up into different categories or land types that may show a different valuation for wooded land than non-wooded land. Also, in the case of crops, the valuation of land is also split up so that tillable cropland is valued separately from other land types such as swamp. This doesn’t necessarily mean that wooded land is always worth more than non-wooded land. Sometimes the opposite is true.
Not necessarily. The amount of tax collected is determined by State Statutes, County Board, School Board, Township Board, City Council, and other elected officials. The County Board has the key role in setting the property tax levy at the county level. A simple way of describing the tax system is through the pie analogy. The whole pie represents the amount of money the local government needs to operate. Each taxpayer has one piece of the pie. The size of that piece is determined in large part by the values and classifications on the property.
18. Why did my taxes go up even when my value went down? Top
This has been a very common scenario in recent years when the tax levies have increased but the valuations of properties have decreased. Keep in mind that values are only one part of the tax equation. Here’s a simple example: If all property values in a city go down 10% but the amount that the city needs in taxes goes up 3%, then each property’s tax bill would likely go up by 3% if all other factors are held constant. This is because the share of the tax burden on each parcel has remained the same when taxes increased.
This question has a complex answer that cannot be fully explained here. The primary and most common reason for big differences would be due to classification. For example, an agricultural homestead has a much lower tax rate than most others. The ag homestead classification also has additional tax credits that other classifications do not receive.
Another reason for large differences is due to the local tax rate. This rate is determined by the County Auditor. The rate is less in areas with more market value and lower tax levies. In Aitkin County, lower local tax rates are typically found in townships with large amounts of lakeshore.
20. What do I have to do to claim a homestead classification? Top
To receive a homestead classification, property owners need to fill out an application with the County Assessor’s Office. The property needs to be the owner’s principal and primary residence. If there is a question about residency, the office staff may ask to see and verify items such as a driver’s license, voter’s registration, or other documents. A property inspection by a licensed appraiser may also be made. Social Security Numbers are required by law on all applications.
Usually, only one homestead is allowed per property owner. A second homestead can be obtained for qualifying relatives and spouses under special circumstances. Contact the Aitkin County Assessor’s Office for more information on relative, spousal, and special agricultural homesteads.
Homestead classification can provide a significant reduction in the property tax bill on a parcel, especially when the property is agricultural. State Law provides for substantial penalties for misleading or lying to government officials to reduce tax obligations.
The assessor’s office needs a current homestead application on file for all homesteads in the county. For some properties, the application on file is on an outdated format from over 20 years ago. For other properties, there may be a question about if the property actually meets the homestead qualifications. It’s important to return a completed homestead application that’s been sent to you otherwise the homestead may be removed.
The Minnesota Department of Revenue oversees and audits the operations of each county assessor’s office in Minnesota. As mentioned above, sales ratio studies are conducted to check sales against the current Estimated Market Values. If the median sales ratio is high or if properties are overvalued, the state expects the assessors to reduce values in an area. The opposite is true for low ratios and undervalued properties.
The County Assessor also reports to the County Board. The County Board funds the operation of the office, approves staffing levels, and sets policies that affect the how the office runs.
23. What are the educational or licensing requirements for assessors? Top
**Assessors in Minnesota must be licensed annually by the State Board of Assessors. With this licensure, a minimum of 40 hours of approved continuing education is required every four years including several week long courses over their career. Also, all licensed assessors must have a minimum of one year of assessment experience. Assessors must adhere to a standard code of ethics in Minnesota.**