MINNEAPOLIS (WCCO) — Earlier this week, cities and counties began sending out 2015 proposed property tax notices, including the estimated market value of your home.
In Ramsey County, the assessments increased by an average of 10.4 percent. In Hennepin County, there was an average increase of 8.4 percent and in Anoka County, the average jump was 18.7 percent.READ MORE: Judge To Decide On Evidence Allowed At Kyle Rittenhouse Trial
So, how do cities and counties figure out how much our homes are worth?
“It’s a challenge, it’s definitely a challenge,” said Ramsey County Assessor Stephen Baker.
The state requires the counties, and in some cases cities, to assess at 100 percent of the market value. Essentially, they try to figure out what a house would go for on the open market.
But the state also gives a little wiggle room for the assessments to be between 90 – 105 percent of actual sale prices in the area.
In Ramsey County, the ratio of assessed market value to sales prices was 95.5 percent. In Hennepin County, it was 97 percent.
“We look at a lot of the things that, say, if you have an appraiser come out to your house for a mortgage appraisal,” Baker said.READ MORE: Minnesota Weather: Severe Weather Threat Fizzles, But More Heavy Rainfall Coming Overnight
Ramsey County, as well as other municipalities across the state, look at the data on a home as of Jan. 2 of every year. Age of the house, square footage, number of bedrooms and bathroom, air conditioning and finished basements are just some of the data points the assessor’s office takes into consideration.
Then every five years, an appraiser will physically visit to update. About 15 percent of us let him or her inside our homes. If that appraiser can’t go inside, the law instructs them to estimate from outside.
“Walking around a house, you can see that not only does it have new siding but look, it’s got, you know, this bump out in the back off the kitchen and it’s got some new windows,” Baker said.
Then the assessor’s office looks at similar properties that have recently in the neighborhood. They’ll take seven comparable sales and kick out the two worst matches.
“We look first in the same neighborhood,” Baker said. “On the same street is ideal, but that doesn’t always occur.”
From there, all of that information goes through a series of statistical analysis to determine what the assessor believes is the value of the home.
Apartment complexes, rental properties and commercial buildings are analyzed differently, but still undergo a sophisticated mathematical process.MORE NEWS: What Is The Key To A Long Life?
Baker admits not all of their data is perfect, but says that’s why there is an appeals process. Less than 1 percent of people contested their assessments last year.