There are a number of state laws that affect both the amount of your property tax and the way it is determined. Learn how to understand your property taxes (PDF).
Tax levies
Each year local governments go through a budget process to determine what services they will provide, how much these will cost, and where they will get the money. There are more than 70 local governments in Hennepin County.
After taking into account other sources of revenue (such as state paid aid, fees, etc.) the rest is levied on taxable properties. All property is located in more than one taxing district. For example, property can be in a county, city, school district and other special taxing districts. The tax rate for each taxing district is determined by the county auditor by dividing this levy by the taxable value of the property in the district.
Property value – relative to the value of all property in the district
The value of your property is determined by the assessor. Valuation reflects the estimated fair market value of the property as of January 2 of the year before taxes are due. Property owners may appeal their valuation.
Your share of the levies is based on the value of your property relative to the value of all other property in the district. If a local governments decided not to change the amount of its levy from one year to the next, your tax may go down, go up or remain the same. For example, if the value of your property doesn't change, but the values of the other properties in your district go down, your tax will increase because your share of the total value increased. Likewise, if the value of the other properties in your district go up, your tax will decrease because your share of the total value decreased.
Property use
In Minnesota, properties with the same market value will be taxed different amounts depending on how they are used. For instance, commercial property will have a higher tax than residential property of the same value. This is done by using classification rates set by the state legislature to give more weight to the value of commercial property as compared to residential property.
The major classifications of property in Hennepin County are:
- Residential
- Commercial and industrial
- Apartments
- Farms
Can I do anything to change my property tax?
There are several ways you can take part in the property tax process.
- Attend the annual truth-In-taxation meeting to discuss how tax levies were determined for the coming year. If your district is not required to have a meeting or you cannot attend, call or write your elected officials.
- Direct questions about your property value or its classification to your local assessor.
- If you are concerned with spending, get involved in the budget process.
- Contact your state representative and/or state senator, if you would like to see changes in the property tax process.