Residents in Minneapolis, Minnesota, particularly northern Minneapolis and Hennepin County, were recently burdened with the proposal for exorbitant property tax rate increases for the following year.
Despite no amounts set in stone, the higher tax fees are due to the increased assessed value of homes over the past year. Some residents report seeing a predicted increase as high as 20%-40%.
In these times of recession, this has come as a shock to many. Thankfully, there are certain property tax exemptions that Minneapolis residents can take advantage of if they qualify.
By looking at various programs that can help cut back on the upcoming tax fees, homeowners can better understand the resources available to them.
We’ll discuss the Homestead Exemption, Property tax exemptions for veterans and disabled individuals, exemptions for the elderly, and also exemptions for certain counties in Minnesota. Keep reading for a breakdown of property tax information in Minnesota.
Property Taxes in Minneapolis
In Minnesota, property owners typically pay a property tax based on the value of their property. Moreover, there are two types of property taxes in the state of Minnesota, to be exact: market value levies and levies based on net tax capacity.
When it comes to your share of the overall property tax levy, it’s contingent on the market value and how your real estate happens to be classified. Moreover, the assessor determines the classification and estimated market value on January 2 every year.
The assessor will arrive at an approximation for the value of your home by using the historical sales of properties similar to yours.
By March 31 of each year, the County Treasurer’s Office will mail a property tax statement to all property owners. The statement will provide a detailed and itemized list of the amount of property tax that’s due to every taxing authority.
Your property tax payment is due on May 15 and October 15. However, if either of those dates falls on a holiday or a weekend, the tax amount will be due the following business day.
Containing over 20% of the population, Hennepin County is home to Minneapolis. In Hennepin County, the tax rates are among the highest in the state, and they are even a bit higher than the national average.
Hennepin County has the highest average effective tax rate in Minnesota at 1.28%. On the other hand, Ramsey County is more rural and has a lower rate of 1.27%.
We buy houses in Minnesota, so we can assist you if you’re interested in relocating to another county with lower property taxes.
Minnesota Property Tax Exemptions
Properties may be exempt from property tax because of any of the following reasons:
- If the property has an exempt purpose, and it is feasibly necessary to further the mission of the exempt organization
- If an exempt institution owns the property
- If you are looking for tax exemption, apply to the City of Minneapolis Assessor’s Office. The onus is then on your organization to prove to the assessor that your property is deserving of exemption under Minnesota law.
Homeowners must submit all property tax exemption applications by February 1 of the year that you filed for an exemption or 30 days after you’ve purchased the property.
Most owners or authorized representatives of exempt properties have to reapply for exemption every three years. This mandate applies no matter the year that you filed initially.
Note: The various programs listed below reduce property taxes for many different properties and owners in Minnesota.
There are some cases where you will automatically receive a benefit and reduced costs if you happen to qualify without the need to apply. In other cases, you have to apply, typically with your county assessor.
If you are someone who bought a home in Minnesota that is your primary place of residence before January 1, 2020, you can apply for a homestead exemption on your home and land. To receive this exemption, you have to live in the house, and the home has to be your legal place of residence for all purposes.
Thanks to the Minnesota statute, homeowners can claim up to $975,000 in agricultural value or $390,000 in property value as a “homestead.” By state law, this exemption is limited to 160 acres which usually applies to farms in practice.
In Minnesota, married couples cannot double the homestead exemption amount as in many other states. However, the exemption amount is already very generous compared to other states.
Property owners in Minnesota can protect up to $1,125,000 in bankruptcy if the owner uses it for agriculture and up to $450,000 of home equity. However, before you file for bankruptcy, consider companies that buy houses in Minneapolis to get a fair price for your home.
Should you decide to still file, the federal government has homestead protections for homeowners forced to file for Chapter 7 bankruptcy. However, as of 2014, the value is limited to $22,975. Since you cannot claim homestead exemptions in both jurisdictions, it’s best to choose Minnesota’s exemption anyway.
Property Tax Exemptions for Seniors and the Disabled People
The Senior Citizens Property Tax Deferral Progr grants property taxpayers the ability to defer a certain amount of their homestead property taxes until a later date. To qualify, seniors must be at least 65 years old and have a household income no higher than $60,000.
Despite how high the tax fee might be on the homestead, the taxpayer still has to pay three percent of the previous year’s total household income. The state will then assume responsibility for any amount higher than the three percent, which is known as “deferred tax,” to the home’s residing county.
A lien gets attached to the property, and the deferred tax becomes a loan. The amount of interest calculated for the loan is the same rate for unpaid state taxes. The rate cannot go above five percent.
Before transferring the property’s title, the interest and the deferred tax have to get repaid.
Property Tax Exemption for Disabled Veterans
The property tax exemption for any disabled veterans will assist homeowners by decreasing the value of their homes up to $300,000. This deduction helps lower their property taxes since their home value affects the amount they pay.
Certain disabled veterans, surviving spouses, primary caregivers of veterans that qualify, and spouses that have survived military personnel that died during duty are eligible for this exemption.
If a veteran is totally and permanently (T&P) disabled, they can receive the full $300,000 deduction. If a veteran is not permanently and totally disabled but has received a disabled rating of 70 percent or more, they can receive $150,000 in lowered value assistance.
Tax Exemptions Per County in MN
Your county may offer individual tax exemption programs for damaged property, such as in Hennepin County, and other counties may offer a Homestead extension. It’s essential to check with your local county assessor’s office to understand if you qualify for any exemptions on your property.
Hopefully, this guide illustrates the looming problem of rising fees for property tax in Minneapolis. With the pandemic still affecting the economy, your county might offer additional assistance for property tax relief.
Additionally, if you qualify for any of the exemptions that we listed, be sure to fill out the proper paperwork to begin receiving deductions as soon as possible. Visit your local government website for more information, and follow the current news regarding the impending tax Levy adjustments in Minnesota.