Here’s Why Assessed Property Values Are Up In St. Louis County
Property owners in St. Louis County will be greeted with a letter in the mail over the next few weeks that will play a large role in how much their eventual tax bill is for next year. It's the time of year that the county sends out their annual Estimated Market Value (EMV) notifications. Many property owners might be surprised to see that the value of the land and structures they own has gone up. In some cases, significantly.
For some, the Estimated Market Value statement is the first clue they have in what their property taxes could look like in the future. That statement provides details on a property's estimated market value - the price a property would sell for on the open market - as well as its classification.
According to Minnesota law, all property in the state must be valued at their market value for eventual taxation purposes. That estimated value number looks at the total worth of the parcel - from the land, the structures built on it, and any improvements to both.
That estimated value and market classification is later used to determine the eventual property tax amount due to the county. Market value for 2022's assessment is determined by the county by January 2, 2022; that assessed market value will then be used to calculate the 2023 property tax bill.
It's worth noting that assessors don't create value for a property. Their role is to interpret what is happening in the marketplace. To do so, they also review sales activity that took place during the set period. For the Estimated Market Value notifications that are going out right now (for 2023 taxes), the real estate sales activity period is October 1, 2020 to September 30, 2021.
It's that time period that could cause many property owners in St. Louis County to see an increase on their Estimated Market Value notification. In some cases, that increase could be substantial.
During this past year, St. Louis County experienced "the busiest real estate market....in 20 years". A perfect storm - an increased demand and short supply of residential property - created a sellers market; that sellers market drove home value up steeply. Historically low interest rates added to the situation.
At the same time, there was a dramatic increase in the cost of materials needed for construction - especially home construction.
The sharp rise in estimated market values isn't just occurring in St. Louis County. It's worth noting that this is the case in neighboring counties - and around the country, too.
St. Louis County officials are quick to note that an increase in the Estimated Market Value doesn't necessarily mean that property taxes for a parcel will go up. A number of other factors are plugged into the equation at tax time - including local city and school district budgets, levies, etc.
County officials have shared, though that "this significant increase in residential property values is expected to shift a higher share of the levy to homeowners versus to those owning commercial properties and other classifications".
Property owners that have specific questions in relation to their Estimated Market Value can check out the St. Louis County website. "Any property owners with questions specific to their valuation and classification notice should contact their assessor first; contact information can be found at the bottom right of the front page of the notice or online". They add that "issues can often be resolved at this level without the necessity to file an appeal".