What is Market Value?

What is Market Value?

Market value for property tax purposes is the likely price a property would sell for on the open market. 

Market value is defined in Minnesota Statute 272.03 subd 8.

Assessors must estimate the market value of each property in the county as of every January 2nd.

How is Market Value Determined?

State law requires that the value and classification of real estate be established as of Jan. 2 each year. The County’s Assessing Services Department works throughout the year to estimate the market value of each property for the following Jan. 2. 

View Property:
Value and classification of real estate must be established on January 2nd each year. The County Assessing Services Department works throughout the year to estimate the market value of each property for the following January 2nd assessment.

Any property that had a building permit issued is viewed and its new value estimated for January 2nd following the construction.

Gather Data:
Lists all items that have an impact on market value, such as size, age, quality, basement finish, and extra features, such as fireplaces, walkout basements, etc.

Compute Value:
Data is entered into a mass appraisal system. Actual sales are entered to reflect market trends, and the computer calculates the property’s value.

Analyze Sales:
Each year the assessor studies actual sales of property in each community. Sales in a 12-month time period before the January 2nd assessment date, (from October 1st to September 30th) are reviewed to find out what properties have sold for on the open market.

These sales are used as a guide to help determine 'what similar properties would likely sell for' if they were placed on the market.

The State Board of Equalization requires the overall ‘level of assessment’ to be between 90-105% of market value. Olmsted County consistently meets the State Board’s requirement.

Mail Notices:
The Assessing Services Department mails a Value Notice to each property owner around the middle of March every year. The assessment on January 2nd forms the basis for the following year’s tax.  

Notice of Valuation and Definitions

Estimated Market Value - This value is what the assessor estimates your property would likely sell for on the open market. State law requires assessors to value property at 100% of market value. See "what is market value" for an expanded definition.

Value of New Improvements - This is the assessor's estimate of the value of the new improvements you have made to your property in the last year.

Green Acres - Only applies to agricultural property that is facing increasing value due to development pressures not related to the agricultural value of the land. The assessor arrives at this lower value by looking at what comparable agricultural land is selling for in areas where there is not development pressure. The taxes on the higher value are deferred until the property is sold or no longer qualifies for the program. See "Green Acres" for an expanded definition.

Taxable Market Value - This is the value that your property taxes are actually based on, after all the reductions, limitations and deferrals. Your 2010 value, along with the class rate and the budgets of your local government, will determine how much you will pay in taxes in 2010. The taxes you will pay in May of 2011 will be determined from the 1/2/2010 taxable market value. Remember: your property is assessed in one year and taxed in the next year.

Tax Capacity