Real Estate

The Ultimate Guide to Minnesota Property Tax

By Tom Burchnell
minnesota property tax

If you own a home in Minnesota, you pay property taxes. The thing is, the Minnesota property tax you pay isn’t the same as the property tax paid by residents of other states in the United States. You don’t even pay the same property taxes as other Minnesotan residents, or even the same taxes as others in your neighborhood.

The property tax that you pay is dependent upon the tax rate where you live and the value of your home, including the land your home sits on. Local property taxes are used to fund certain local services and programs, such as public schools, police protection, fire services, street repairs, and more. Tax rates are subject to change annually based on the service needs of your municipality and how much money is required to pay for those services. The information is then used to figure out the tax percentage, which is then applied to the assessed value of your property. 

For residents of Minnesota, the property tax rate is fairly close to the national average. Even so, the tax rate can vary greatly depending on where you live in the state. 

What Is the Minnesota Property Tax Rate?

The Minnesota property tax rate varies based on the county you live in. The actual tax rates range from 0.52% to 1.33%. As a result, tax payments vary depending on where you live in the state.

A home valued at $190,000 with a property tax rate of 0.52% would pay $988. A home valued at the same amount in a county with a tax rate of 1.32%, on the other hand, would pay $2,508. 

Minnesota Property Tax vs Nationwide Averages

The Minnesota property tax rate is fairly close to the national average. Below are some of the averages you can expect in Minnesota versus the rest of the US.

  • The average property tax rate in Minnesota is 1.17%
  • The nationwide property tax rate is 1.119%
  • The average Minnesota property tax payment, based on the median property value, is $2,225
  • The average national property tax payment is $2,279

Property Tax Highs and Lows

While Minnesota property tax is fairly close to the national average, the actual tax rates can vary from county to county. 

  • Hennepin and Ramsey (1.33%)
  • Grant (1.32%)
  • Chisago (1.31%)

The following counties have the lowest tax rates in Minnesota

  • Aitkin (0.52%)
  • Cook (0.56%)
  • Cass (0.61%)

How to Calculate Your Minnesota Property Tax

Calculating Minnesota property taxes (also sometimes called Minnesota real estate taxes) can get confusing. Your first step is to determine your property’s taxable market value.

Determining Your Taxable Market Value

Every property has a market value. Simply put, the market value is the property’s real market value. In many cases, the taxable market value is the same thing as the market value, which means that your property’s full value is used to assess your tax capacity. 

Some homeowners in Minnesota can have a portion of their property’s market value excluded from taxation. There will be more information on those cases later. 

Class Rates for Minnesota Properties

Properties in Minnesota are classified by their use, which determines their class rate. Residential single-family homes have a class rate of 1.0% for properties up to $500,000. For homes over $500,000, the class rate is 1.25%. The higher class rate is applied only to the amount over $500,000.

Your Tax Capacity

Your tax capacity is your taxable market value multiplied by your class rate. The resulting figure (your tax capacity) is used along with your tax capacity rate to determine your tax bill. The tax capacity rate is determined annually by the county auditor. 

Let’s say your home is valued at $200,000. This figure is multiplied by the class rate of 1%, leaving you with a tax capacity of $2,000. The tax capacity is then multiplied by the tax capacity rate applied to where you live to give you your tax bill before any special assessments.

When Are Property Taxes Due in Minnesota?

Property taxes in Minnesota are due on May 15 and October 15 in equal installments. If your property taxes amount to $100 or less, the full balance is due on May 15.

Is There an Easier Way to Figure Out Minnesota Property Tax?

Trying to calculate your taxes on your own can get confusing pretty quickly. Fortunately, there is an easier way. SmartAsset offers a property tax calculator. All you need to know is your home’s taxable market value and your zip code. Some counties, such as Wright and Scott, offer their own calculators. Check with your county government’s website to see if your county provides a similar tool. 

Special Programs in Minnesota

There are some special programs that can reduce the taxable market value of your home. One program is the Homestead program. The amount excluded is 40% of the first $76,000 in value minus 9% of the value over $76,000. The Homestead program only applies to homes valued under $414,000.

For a home valued at $200,000, your taxable market value would be as follows:

  • (76,000 x 40%) – (124,000 x 9%)
  • (30,400) – (11,160) = $19,240
  • $200,000 – $19,240 = $180,760 taxable market value

Other special programs in the state of Minnesota include:

What if You Can’t Afford Minnesota Property Taxes?

Not being able to afford property taxes is a scary prospect. Nonpayment isn’t an option. If you skip out on your property taxes, you could lose your home. You could always sell your home and move, but what if you didn’t have to leave?

A sale-leaseback offers a solution for Minnesota homeowners who are having trouble meeting their property tax payments. It allows you to sell your home and remain as a renter.

Key Takeaways

The inability to make your property tax payments in Minnesota doesn’t mean that you need to give up the home you love. Talk to a financial advisor about the options available to you.

Property Tax
Real Estate
Tom Burchnell
Written by Tom Burchnell
Director of Product Marketing

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