Every businessperson and property owner knows that property tax valuations can have a huge impact on a company’s bottom line. Property taxes are one of the primary funding mechanisms for local governments, which is why officials have an incentive to inflate property market values.
Minnesota’s Property Tax Assessment Procedures
Under Minnesota law, real property, which includes the real estate and certain fixtures and improvements, must be valued at market value.
Minnesota courts have approved three main approaches for determining a property’s market value:
This property valuation approach bases a property’s value on comparable sales of other properties.
The cost approach to property assessments estimates what a new version of the same building would cost minus depreciation.
The income-based approach for determining property value is used for income-producing properties and considers the income that a property is expected to generate.