Property

Crow Wing County shares tips to understand the property tax process – Pine and Lakes Echo Journal

CROW WING COUNTY — Local property tax valuation and classification notices were sent to all property owners in Crow Wing County.

These notices inform citizens of the assessed value of their property as of January 2022, based on sales of comparable properties between October 2020 and September 2021. The assessed values are then used to calculate taxes due and payable in 2023.

Highlighted below are some of the major components – and challenges – of the property assessment process and issues to be aware of when reviewing your valuation notices.

A state prescribed process

Although counties perform the bulk of assessment work in Minnesota, the state Legislature determines the policies and procedures that counties follow.

State rules govern how the county classifies and values these properties, based on physical characteristics, use of the property and sales of comparable properties during a prescribed period. The county can only use “arms-length” transactions for comparable sales, which, for example, preclude the county from using foreclosure sales when the county determines values.

In addition, state rules require Crow Wing County assessed values to fall within a statistical range the state determines. If the county assessment is lower than or higher than that range, the state requires all property values to be raised or lowered accordingly.

The time lag confusion factor

The state’s assessment rules also require the county to use property sales that occurred as much as 15 months ago to determine assessed values. This time lag creates confusion when current market conditions do not reflect sales that occurred up to a year and a half ago.

For example, the current notices reflect the 2022 assessment based on sales of comparable property that occurred between October 2020 and September 2021. The result: 2022 assessed values may not reflect current market conditions.

In periods when real estate prices are rising, this time lag delays increases in valuations. But during time of declining values, it understandably generates inquiries from taxpayers concerned that the assessment does not reflect current market conditions. 

Although all taxpayers rightly are concerned with the assessed value of their property, the spending decisions of local governments – county, cities, townships and school districts – determine whether tax rates go up or down.

For example, if the assessed value of all properties in Crow Wing County went down equally by 10%, property taxes could still be higher if the budgets of local governments were higher.

Assessment valuations are determined without regard to tax rates, but according to comparable sales values as discussed above. The tax rate is determined at a later point, based upon the level of spending approved by local elected officials at the county, city, township and school district levels.

Local units of government determine how much they need to run their operation – values are only used to determine how big a share of that spending each homeowner will have to pay. 

Paying property taxes is like slicing a pie.

Government spending is the pie. The value of each property determines how big a slice of that pie each property owner pays in taxes.

There are five main reasons why a property owner may see higher taxes one year to the next: 

  1. Government spending went up. 
  2. The property’s market value decreased at a lower rate than other properties. 
  3. The property’s market value increased at a higher rate than other properties. 
  4. The property classification changed. 
  5. The state changes the rules, as it did in 2011, converting the homestead credit to homestead exclusion.

If none of these things occurred, property taxes owed should not be more from one year to the next. 

Taxpayers are encouraged to contact the Land Services Department with any questions they may have about their property’s valuation, classification or property taxes. Taxpayers may contact Land Services by calling 218-824-1010, emailing

landservices@crowwing.us

or visiting the county website at

www.crowwing.us.



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