Some Minnesota property owners to see increases in tax
Minnesota owners of choice farmland and lakeshore property likely will see a dramatic rise in the property taxes they will be paying. The reason is that those properties have been under-taxed for the past decade. For many years, the "limited mark...
Minnesota owners of choice farmland and lakeshore property likely will see a dramatic rise in the property taxes they will be paying.
The reason is that those properties have been under-taxed for the past decade.
For many years, the "limited market value" provision in the state tax code has shielded the properties with big value increases. Lakeshore residences and high-end farmland are among the properties that experienced large increases in value. The limited market value measure produced a cap on how much of that increase could be taxed.
But the Legislature voted in 2000 to phase out the program in 2009.
"As far as calls to the office are concerned, we've had to explain this sunset of the law to more agriculture property owners than lakeshore property owners," said Robert Wagner, Polk County assessor.
"It's not that the owners have a problem with the value placed on their farmland. They know what the land is really worth. It's more a matter of explaining why it's gone up so much at once."
Wagner said Minnesota tax law is so complicated and there are so many other variables that he can't say what the average increase percentage would be. But reports from other counties say the increase could be 30 percent and more on the affected properties.
The bad news for some will be good news for others. The rise in some tax bills will mean less of a burden for others. It won't mean more tax dollars available for units of government.
Minnesota levies dollars, not mills as is done in North Dakota. That means the property value rises won't mean more money for governments, but instead a different share of the tax burden.
"These properties have benefited over the years," Wagner said. "By holding the values down artificially with the limited market value law, the properties that weren't under the law were actually picking that share up."
Bryan Paradis, president of the Union Lake/Lake Sarah Improvement District, said he hasn't heard many complaints from lakeshore owners about the inflated tax statements. He said that's probably because the 340 parcel owners in the improvement district will be splitting roughly $500,000 in expenses to handle flooding and milfoil weed problems.
"All of the buzz on our lake is about the pump and screens," he said.
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