Tax season is here, and for homeowners, that means it’s time to think about property taxes. Whether you’re a new homeowner or have been paying property taxes for years, knowing how they work, how they’re calculated, and ways to potentially reduce them can help you manage this expense wisely.
Here’s a high-level overview of Minnesota’s property tax system:
What are property taxes?
Property taxes are local taxes levied by municipalities, counties, or other taxing authorities to fund public services such as schools, roads, emergency services, and local government operations. In Minnesota, property taxes are based on the assessed value of your home and are due twice a year, on May 15 and October 15.
What are property taxes used for?
Property taxes are a primary source of funding for essential community services.
These include:
- Public Schools
- Emergency Services
- Infrastructure
- Local Government Operations
- Community Development
How are your property’s taxes calculated?
In Minnesota, property tax rates are determined by local governments and applied to your home’s assessed value.
The general formula for calculating your property’s taxes is:
Assessed Value x Local Tax Rate = Property Tax Owed
Assessments are conducted periodically by local tax assessors, who determine the market value of your home based on recent sales of comparable properties, improvements you’ve made, and other factors. Tax rates, also known as mill rates, are set by local governments and can change from year to year based on budget needs.
When are property taxes due in Minnesota?
Minnesota property taxes are due in two installments each year:
First Half: May 15
Second Half: October 15
Many homeowners pay property taxes through an escrow account as part of their mortgage payment, while others pay directly to the local tax authority.
Ways to potentially lower your property’s taxes:
Check Your Property Assessment:
If you believe your home’s assessed value is too high, you may have the option to appeal the assessment and potentially lower your tax bill.
Compare Neighboring Properties:
If similar homes in your area have lower assessments, you may have grounds for an appeal.
Look for Reduced Classifications:
Minnesota offers exemptions for senior citizens, veterans, disabled homeowners, and primary residences (homestead exemptions). Check with your local assessor’s office to see if you qualify.
Apply for the Minnesota Property Tax Refund: Homeowners with qualifying income levels may be eligible for a property tax refund from the state. The application is typically due by August 15.
How a property’s tax rate affects real estate decisions: 
For homebuyers, property taxes should be a key factor in deciding where to buy. Higher tax rates may mean a larger monthly mortgage payment, while lower rates can make homeownership more affordable. (For sellers, an understanding of local property tax trends can help in pricing and marketing a home effectively.)
With tax season in full swing, now is the perfect time for Minnesota homeowners to review their property tax statements and ensure they’re not overpaying. By understanding how property taxes are calculated and exploring ways to reduce them, you can better manage this expense and make informed real estate decisions.
If you have questions about how a property’s taxes may impact your home’s value or future real estate plans, feel free to reach out—we’re happy to help! Reach out to us here or review our roster of full-time real estate professionals and connect with the agent best suited to your real estate preferences •