What is Market Value?
Minnesota Statue 272.03 defines "market value" as "the usual selling price at the place where the property…is…at the time of assessment." It is "the price that could be obtained at a private sale or an auction sale, if the assessor determines the price from an auction sale represents an arms-length transaction. The price obtained at a forced sale shall not be considered." In other words: Market value is the price that would prevail under competitive open-market conditions.
How Market Value is Determined
| View Property Value and classification of real estate must be established on January 2nd each year. The County Assessor’s Office works throughout the year to estimate the market value of each property for the following January 2nd. |
Approximately every fifth year, a County Appraiser will view the property. Any property that had a building permit issued in a given year is viewed and its new value calculated for January 2nd following the construction.
Gather Information
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| Compute Value The characteristics are entered into a computerized appraisal system. Data from actual sales is updated to reflect market trends. |
The market value estimated by the appraiser is to be very close to the amount the property would sell for, if placed on the open market.
The State Board of Equalization requires the overall level of assessment to be between 90-105% of market value. Wilkin County consistently meets the State Board’s requirement.
| Analyze Sales Each year the assessor analyzes actual sales of property in each township or city. Sales in a 12-month time period preceding the January 2nd assessment date, are reviewed to determine what properties have sold for on the open market. These sales are used as a guide to help determine what similar properties would likely sell for if they were placed on the market. |
| Mail Notices The Assessor’s Office mails a Value Notice to each property owner the end of March each year. The assessment on January 2nd forms the basis for the following year’s tax. |
The "tax capacity value" is determined by multiplying the market value of the property by the statutory percentage rates (also called class rates) for the specific classification(s) / use(s) on the property. Minnesota has many class rates and those rates can be changed only by the State Legislature.
Example: the class rate for homestead property is significantly less than the class rate for commercial or industrial property. The classification of a parcel determines what percentages are to be used to determine the total tax capacity of each parcel in Wilkin County.
The "tax capacity rate" is determined annually by the County Auditor. This rate is multiplied by the ‘tax capacity value’ to arrive at the property tax.
The "tax capacity rate" is a result of dividing the property tax levies submitted by the taxing authorities (school district, county, city / township, metropolitan authorities, etc.), by the overall total tax capacity value for that taxing jurisdiction.