With a new year, comes a new round of taxes. Property owners will have received their 2021 property tax valuations payable in 2022 in January, and for some it may be a shock to see how much property taxes have risen over the last year.
But fear not, for Minnesota gives property owners a way to lower their taxes – enter the Property Tax Appeal.
What is a Property Tax Appeal and how does it work?
The state and counties assess the value of all real estate – both commercial and residential – every January for the taxes payable the following year. The tax valuation you may have recently received is for the tax bill payable in 2022. You can appeal this tax valuation, and it will apply in the year that they are payable. (ex: If you file an appeal in 2021, you are appealing the tax amounts payable in 2022.)
You must have a valid reason for wanting to appeal the taxes, whether you think the assessed value of your property is too high compared to similar properties, or if you just realized that it is classified wrong, there must be a reason to appeal. All appeals must be filed by April 30th of the year you want to contest. There are no extensions, and no exceptions.
The first step of a property tax appeal is determining a realistic valuation of the property. Did you just have repairs done? Or has there been no change for years? If your property has recently been appraised this is likely the best indicator of value.
After an appeal has been filed, the County assessor may want to conduct a walkthrough of the property to better understand the current value. Most property tax appeals negotiate and deal directly with the assessors to reach a compromise on value. The assessors will generally consider the condition, age, need for improvement, location and comparable properties in addition to the most recent purchase price, and any appraisals.
If an agreement cannot be agreed upon with the assessor, the appeal will get turned over to the County Attorney and the process will begin to look more like traditional litigation including discovery, and potentially hearings.
Sounds straightforward – can I do this myself?
While the process is easily summed up in a few sentences and seems straightforward, as 2020 has shown us, there is always a wrench in the works. It is possible that you can handle this all yourself and be triumphant in obtaining your tax refund, however, it is possible that you can miss a deadline or make it worse- resulting in drawn-out litigation.
Moral of the Story:
Review your property tax valuation. If something looks off, or the valuation jumped up a huge percentage, I recommend consulting with an attorney to determine if a property tax appeal is right for your situation.