30 Frequently Asked Questions for Minnesota Property Tax Appeals
Do you feel you are paying more than your fair share in property taxes? If so, you may be able to reduce your taxes or obtain a refund. Here are answers to some of the most common questions we receive about filing a property tax appeal in Minnesota.
Property Tax Appeal Essentials
What am I appealing when I file a petition?
The most common basis for filing an appeal is that the assessed value is higher than the property’s actual market value. A petition to appeal seeks to reduce the assessed value of your property, also known as the estimated market value (“EMV”), to reflect the current market.
Are there additional bases for an appeal?
Yes, you can also appeal whether your property was misclassified (i.e., residential, agricultural, commercial), whether your property should be exempt from property taxes, or whether it was unequally assessed when compared with similarly situated properties in the applicable area.
Can I appeal my property tax rate?
No, the tax rate is set by the legislature and local government.
How much money can I save with a property tax appeal?
Residential property is generally taxed at about 1.0–1.5% of value, and commercial/industrial property is taxed at about 3.0–3.5% of value. That means for every $100,000 in reduced assessed value, a residential property taxpayer saves $1,000–$1,500 in taxes and a commercial/industrial property taxpayer saves $3,000–$3,500.
Could the property value go up after filing a petition?
Yes, the value can increase, but only if a petition is taken all the way to trial and the judge determines that the property was under-assessed. If the taxpayer does not want to take the risk that the value may increase, the petition can be dismissed at any time before trial and end the case.
Initiating an Appeal
When is the property value determined?
All property is valued as of January 2 for taxes payable the following year.
When must a petition be filed?
The deadline to file an appeal is April 30 of the year the tax is due. Because property tax appeals are determined by statute, failure to meet this deadline is strictly enforced. Even if you’re a day late, the petition will be dismissed.
What if the April 30 deadline falls on a weekend?
If the appeal deadline falls on a weekend, you may file the petition on the next business day.
Who can file a petition?
Anyone who has an interest in the property can bring an appeal. For properties that are leased, appeals are most often filed by the property owner, although tenants can also bring an appeal. But the lease or contract may limit or direct who can bring an appeal.
Can I include more than one tax year on a petition?
No, the petition can only have one tax year. You must file a separate petition for each new assessment date.
Can I include more than one parcel on a petition?
Yes, you can include more than one parcel on a petition so long as the owner is the same for each parcel and all the parcels are in the same county.
Do I have to take any steps before filing with the Tax Court?
No, there are no requirements that a taxpayer must take before filing a petition with the Tax Court. Unlike other jurisdictions, there is no requirement that a taxpayer first appear before the local or county board of appeal and equalization or exhaust any other administrative remedies.
Do I need an attorney to file an appeal?
It depends. All corporations and limited liability companies with more than one member must be represented by an attorney. Individuals, corporations, or limited liability companies with only one member and partnerships in which the individual is a general partner can represent themselves, but it is recommended that they consult with an attorney.
Proving Your Case
After I file the petition, does the County have to prove that the value is correct?
No, the assessed value is presumed to be correct. It is the petitioner’s burden to overcome the presumption of correctness.
How do I overcome the presumption of correctness?
The petitioner overcomes the presumption of correctness by presenting evidence that the value is incorrect. Although an owner or other fact witness can offer testimony to overcome this presumption, an appraisal report from an expert is almost always sufficient to overcome the presumption.
What happens after the petitioner overcomes the presumption of correctness?
After the petitioner overcomes the presumption of correctness, the Tax Court conducts a de novo review of value. In other words, the Tax Court does not give the assessed value any credit, and instead determines the value for itself based on all the evidence in the record.
How is the market value determined?
The Minnesota courts use the three traditional approaches to value. The sales comparison approach compares your property to similarly situated properties that recently sold in an arm’s length transaction. The cost approach values your property by how much it would cost to replace your property. The income approach values your property by how much income you could generate by renting or leasing the property. After the value from each approach is determined, the three approaches are reconciled against each other to find the EMV.
Do I need an expert to determine the EMV?
If going to trial, generally yes, an expert is needed. While the value of the property can be determined by the property owner or non-expert witness, they must present evidence that allows the Tax Court to conduct the three approaches to value. Because this is a complex and technical analysis, an expert appraisal report is typically required to present the three approaches to value.
What Happens at Trial
How likely is it that I will go to trial?
Almost all cases settle. Generally, the Tax Court receives several thousand property tax petitions per year, and only a handful of cases go to trial.
Who testifies at trial?
Typically, the only witnesses in a valuation case are the expert appraisers.
How do experts present their opinions at trial?
During trial, the appraisal report serves as the expert’s direct testimony at trial regarding their opinions. The expert is not allowed to provide testimony on direct examination unless approved by the Court. Because the expert’s report serves as their direct testimony, depositions of the experts are not typically conducted.
Who decides my case?
All property tax appeals are decided by the Minnesota Tax Court, which is an executive-branch court. Your case will be decided by one of the three Tax Court Judges appointed by the Governor. There are no jury trials in Tax Court.
Timeframe of an Appeal
How long does it take to resolve an appeal?
The process usually takes 1.5–2 years, but the process can take longer if subsequent tax years are consolidated. After a petition is filed, the Tax Court issues a scheduling order with a trial date typically set for about 1.5 years after filing. You can see the full timeline of the process here.
Can I reduce my property taxes without filing a petition?
There is a small window of time to reduce your assessed value without filing a petition. Taxpayers receive their valuation notices in March for the taxes payable the following year. But taxpayers only have until the end of June before the counties finalize their budgets and lock in the assessed values. After this roughly 3-month window closes, the only way to reduce your assessed value is by filing a petition. This 3-month window is different for every county, so you must look at your valuation notice for the meeting date of your local board of equalization and appeal.
Pitfalls to Property Tax Appeals in Minnesota
If I filed an appeal, do I still need to pay the property taxes while the appeal is pending? Yes, all property taxes must be paid as they come due, otherwise it results in an automatic dismissal of your appeal. If a payment is missed, an appeal can be maintained with prompt payment.
If I pay my property taxes and obtain a reduction, what happens?
If you have paid your property taxes and obtain a reduction, the county will issue a refund of the overpayment with interest.
Who is required to make mandatory disclosures?
Taxpayers challenging the assessed value of their property who are income producing must provide certain information by August 1 of the year the taxes are due. Although the statute does not define “income producing,” courts have determined that where the owner and occupier are different entities and valuable consideration flows between them, the property is income producing. Classic examples are apartment buildings or office buildings with multiple tenants. But the courts have applied an expansive definition of what constitutes “income producing,” so a taxpayer should err on the side of disclosure. If a property is owner-occupied and does not generate income, then no disclosures are required.
What must be provided to the assessor as part of the mandatory disclosures?
The statute requires the taxpayer to provide financial statements, rent roll, identification of all lease agreements, net rentable square footage, and a budget. The actual leases must be provided only if requested by the assessor.
What if the taxpayer does not provide all the information by August 1?
The statute does not provide any opportunity to cure a deficiency in the mandatory disclosures, so failure to make full disclosures results in an automatic dismissal. The Tax Court and Minnesota Supreme Court strictly enforce this deadline, no matter how small the deficiency and regardless of whether the county was prejudiced.
Can the information from the mandatory disclosures be kept confidential?
The Minnesota Government Data Practices Act classifies documents provided to the assessor through the mandatory disclosures as non-public assessor’s data, which means that the documents are not subject to a request under the Freedom of Information Act. But the assessors can use the information they received for other assessment duties. If the taxpayer is concerned about maintaining other information as confidential, the Tax Court will enter an appropriate protective order.
August 13, 2024
