One of the challenges we’re facing as the result of the decline in values of Minneapolis and St Paul duplexes is high property taxes that reflect a market value that’s no longer accurate.
This often translates into a little sticker shock when a duplex is a terrific deal, but has insanely high taxes. These are, of course, based on a county computer-generated market value that for whatever reason, doesn’t consider the reality of today’s market.
Well, there is a solution.
In fact, a client called me the other day to tell me just how easy it is. While you can find all of the fine print at http://www.taxcourt.state.mn.us/, the highlights are, basically, you have to be prepared to prove to the tax court that your property is worth what you say it is.
This too is easy. Simply bring in your HUD statement from closing, and/or a copy the appraisal the bank ordered for your loan. There’s a court filing fee ($240 for Regular Division or $150 for Small Claims) that’s fully refundable, and a petition to fill out and “serve” to various upon county officials.
If you have an income-producing property (such as a duplex, triplex or fourplex), you also need to satisfy a few more requirements after you file and serve the petition. Namely you have to provide the County Assessor with financial information about the property, such as income and expenses or anticipated income and expenses. If you don’t, the petition may be dismissed.
Many of the cases people file are resolved without a trial. My client ended up visiting with the Hennepin County Tax Assessor, who agreed she should realize a reduction in the assessable market value of her property.
How much did she end up saving? $1500 a year.
There is a deadline to be aware of, however. Property tax appeals must be filed on or before April 30th the year the tax becomes payable.