How do I appeal my property tax?

With some Eden Prairie homes selling for less than the ‘assessed’ property tax value, many people are wondering how to lower their property tax.  To find out more about the process, I spent some time with Steve Sinell at the Eden Prairie Assessors Office.

A little background is helpful to know how your property taxes are determined.  Minnesota is a levy driven state.  This means that the state takes the budget required for the year, and divides that amount by the amount of tax paying ‘units’ within the state.  The city of Eden Prairie for example has 19,565 units within the city.  This includes all single family homes, condominiums, townhouses, and twin homes.  This would exclude apartment buildings.

Property taxes are determined by a complex combination of the assessed value and the levy base to create the tax extension rate.  This is a very complex formula that I won’t go into detail here.

Your Eden Prairie property tax assessed value is marked to market value once a year.  Each year approximately 20 percent of the homes are visited by the assessors office.   Sales data is poured over to keep up with sales trends in the Eden Prairie real estate market.  This is where the fact that all real estate value is affected very locally, down to the specific neighborhood.

Ok, so let’s say you don’t think your property is worth the assessed value.  The first step to appeal your taxes is to determine what you are appealing.  What I mean by this is that because values are marked to market once a year, your 2008 property tax is determined January 2 of 2007, which means sales data from 2006 is used.  So when you are appealing your tax assessed value, be sure you are comparing the value to the same year of which you are being taxed, the same as the city is doing.

With this in mind, the second step is to do some of your own research.  To do this you need to find some comparable sales data for homes similar to yours.  Base this on criteria such as finished square footage, foundation size, style, year built, and other pertinent data.  It can be difficult at times to find comparable sales for this and most often adjustments have to be made both up and down in values.  If you need help locating such sales data, contact your favorite local Eden Prairie Realtor, (like me) and ask for a mini market analysis.

Lastly, if you are armed with good market data, and you still feel there was a possible error by the city assessors, the next step is to call the assessors office at 952-949-8511.  City assessor Steve Sinell said that there are aproximately 20-25 appeals a year.  As Steve says, at that point the city will either explain how they determined your value, or if there truly was a mistake, then they will ‘fix it’!    He said that most people when they understand how your property tax values are determined, realize that the city was very accurate.  This explains the low number of appeals each year.  Timing is everything in your appeal however as the deadline last year was April 4th.  So, check with the city when you get your next projected tax assessment statement coming in the spring.

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