Frequently Asked Questions
- Is there anything I can do to lower my property taxes?
- How was my property assessed for tax purposes?
- What happens if the tax assessor doesn't reduce my property taxes?
- How long will my property tax appeal take?
AV-Preeminent rated attorney Robert A. Hill and his staff at Robert Hill Law, Ltd. represent businesses of all sizes in property tax appeals throughout Minnesota, including Rochester and the Minneapolis-Saint Paul area. For over 20 years, we have negotiated with tax assessors and presented comprehensive arguments before tax and appellate courts. For the convenience of our clients, we have provided the following answers to some questions we commonly receive.
Q. Is there anything I can do to lower my property taxes?
A. If you believe your property is improperly classified, valued above its likely resale price, or valued differently than comparable properties, you have the right to appeal the market value estimate of your property. Often, an experienced attorney can negotiate a change in assessment by providing evidence of comparable sales to demonstrate market value. If you can show that the market value for your property is less than assessed, you may be able to lower your taxes.
You may also be able to lower your property taxes if your property has been misclassified. Minnesota Statute § 272.03, subd. 1(a) defines taxable "real property" as the land itself, rails, ties, and other track materials annexed to the land, and all buildings, structures, and improvements or other fixtures on it. However, "tools, implements, machinery, and equipment attached to or installed in real property for use in the business or production activity conducted" therein are not considered taxable as real property. Therefore, if the tax assessor has classified one of these exempt items as taxable real property, you may be able to lower your property taxes.
If we are unable to convince the tax assessor that your property's value is less than assessed, there are additional avenues through which we may be able to pursue your appeal. For more information on the appeals process, see the property tax overview.
Q. How was my property assessed for tax purposes?
A. There are three basic approaches that the Minnesota courts recognize for the valuation of a property: the sales or market comparison, the cost approach, and the income approach. The market comparison approach analyzes prices that are paid for comparable properties in actual market transactions. This approach may be difficult for tax assessors to use if there are few comparable property sales locally or even nationally. However, our firm associates with real estate firms in order to get the most comprehensive and up-to-date information on the market. We can use this data in your tax appeal to support our argument that your property was not properly assessed.
The second or "cost" approach is based on what an informed, willing purchaser would pay for the property. In essence, it is an estimate of the land value minus the depreciated value of improvements. While this may be an appropriate approach for valuating new properties, it may be an imprecise approach for valuating older buildings due to the difficulty of accurately valuating depreciation.
The final or "income" approach is generally used in valuating commercial income-producing properties and is based on the income the property is expected to generate. In this approach, the value of a property may be determined by using capitalization rates, or cap rates, which are applied to the first year net operating income. A discounted cash flow analysis may also be used to determine the income property's value. When determining the value of the property, it is important to consider the current economic downturn and its effect, including any vacancies or decreased rents.
Although your tax assessor may have used one of these generally accepted approaches when valuating your property, this does not necessarily ensure that your property's value was correctly determined. The tax assessor may not have all of the information about your property, or may have focused on local comparable sales that might not be as similar as sales found in a broader market. An attorney can help you examine whether you still have a valid claim for appeal.
Q. What happens if the tax assessor doesn't reduce my property taxes?
A. If we are unable to convince the tax assessor that your property's value is less than assessed, the next step is to appeal the case to your county's Board of Appeal and Equalization and then to the Minnesota Tax Court. You have until April 30 of the year your property tax becomes payable to appeal your assessment; for instance, you must appeal your 2010 property valuation or classification on or before April 30 of 2011. The Minnesota Tax Court is comprised of three judges who have some type of background in or knowledge of property taxes, one of which will hear and decide your case. As our reported cases demonstrate, a tax court judge is required to use his or her independent judgment in evaluating all offered testimony and evidence, including information from the tax assessor regarding how the assessment was reached and your own appraisal expert's valuation, before rendering a final decision.
Q. How long will my property tax appeal take?
A. Although there are certain general timelines, the length of time it takes to complete a property tax appeal varies widely. In general, the tax court will hear a case within one year of filing an appeal. The hearing itself continues until both sides have presented all of their evidence, including information on property size, obsolescence, comparable sales, and expert opinions. Once your hearing has ended, the court should make a decision within 90 days. If you are not satisfied by the decision, you can continue your appeal to the Minnesota Supreme Court.
Seek Personalized Representation
If you wish to appeal your property tax assessment, it is critical to consult with an attorney who has an in-depth understanding of real estate and tax law, and who is experienced in dealing with tax assessors, review boards, and the courts. Attorney Robert A. Hill has over 20 years of experience in tax appeals, giving him the legal knowledge needed to help you with your appeal. To speak with him about your property tax appeal, contact Robert Hill Law, Ltd. today.
More Resources For You
The law offices of Robert Hill Law, Ltd. have put together informative pages for the everyday consumer to read. These pages are for information purposes only and do not represent legal advice.
To find out why you should get a property tax lawyer, read our Benefits of a Property Tax Lawyer page to get more information.
We are also offeirng information on how to select a property tax representative and what quesitons you might want to ask before selecting one to represent you.
Other resources include:
When to Appeal Property Tax Assessments
What to Do When You Get A Tax Lien