Looking to help clients buy or sell in Minneapolis or a surrounding area? Navigating real estate means embracing the less glamorous parts—like property taxes. Property taxes can make or break a sale; you don’t want your client to fall in love with a home only to discover that the property tax is unaffordable or too excessive for their budget.
Preparing your client with the right information sets them up for success and leads to more sales for you. Curious to know more? We have the information you need about Minneapolis property tax.
Property tax rates in Minneapolis for 2022
Minneapolis is part of the beloved Twin Cities area, including St. Paul. The area is known for its diversity, gorgeous skylines, and several great tourist attractions, including the Mall of America and the largest state fair in the country. Minneapolis is family-friendly, with many museums and zoos, theme parks, and nature trails to explore.
As a popular city with in-demand attractions, the cost of living in Minneapolis is 3% higher than the national average.
The median home value in Minneapolis is $329,654, up 2.6% since 2021.
The Minneapolis property tax rate is 1.33%. In Hennepin County, the average rate is 1.28%. Both are larger than the national average of 1.07%, making property taxes high in Minneapolis.
The median property tax collected in Hennepin County is $2,831, or 1.14% of a property’s assessed fair market value. This is higher than Minnesota’s median property tax of $2,098 (1.05% assessed fair market value).
The formula for determining property tax in Minneapolis multiples tax capacity by the local tax rates to create a base tax value. You then subtract any credits and add levies and general state tax to determine the property tax due.
Will Minneapolis property tax rates rise in 2023?
The Minneapolis property tax rate is already above the national average. There are many factors in determining the final tax rate per homeowner, including school rates, county rates, and much more.
Levy limits meant to help reduce property taxes have not been effective since 2014. However, a bill introduced in 2022 proposed levy limits in 2022 and 2023, expected to lower property tax refunds and income tax deductions for homeowners.
However, Minnesota announced in November of 2022 to expect a maximum increase of preliminary property taxes by 6% or $697.7 million.
In cities like Minneapolis in 2023, preliminary property tax levies are expected to increase by 9.1%.
In 2021, the tax capacity rate in Minneapolis was 54.880%, increasing to 59.351% in 2022.
A free tax estimator tool for Minneapolis roughly estimates the property taxes you could pay, though it isn’t guaranteed to be exact.
Tax rates in surrounding areas
If you would rather commute to Minneapolis than live in the city, check out some nearby locations and their tax rates:
- Golden Valley: 1.38%
- St. Louis Park: 1.27%
- Bloomington: 1.18%
- Robbinsdale: 1.32%
- Crystal: 1.40%
These are far from the actual amount of surrounding cities, but they give you an idea of what tax rates are like around the City of Minneapolis. Many are above the national average, but some are lower (or surprisingly higher) than Minneapolis.
What does property tax revenue fund in Minneapolis?
Minneapolis does not set or collect taxes. They simply assess and classify the information needed to calculate how much you owe. Instead, local property taxes collected by Hennepin County fund services and programs in the area, including:
- Police departments
- Fire stations
- Street maintenance
- Libraries
- Public schools
- Metro stations
- Metropolitan Mosquito Control District
Important information to know when moving to Minneapolis, MN
Minnesota’s general sales tax rate is 6.875%, though there are exceptions such as food, prescriptions, and clothing. In Hennepin County, you can expect an additional 0.15% sales tax. The City of Minneapolis has a 0.5% sales tax within the city limits.
Minneapolis puts together an annual budget in December, determining how much services in the city will cost. They first consider other taxes collected, like sales tax, before deciding the amount of property tax to collect.
Property assessments happen for Minneapolis homeowners every five years. Property tax assessments are completed by January 2nd. Starting in March, assessors send out a valuation notice, including the estimated and taxable market values. Assessors consider your home, land, and additional structures (like sheds, porches, and gazebos).
Property taxes are due on both May 15th and October 15th (the first half of taxes due by the former). If either date falls on holidays or weekends, pay by the next business day.
Qualifying taxpayers can apply for the Hennepin County Homestead Exemption, which reduces the appraised value for lower annual property tax rates. Applications are available by calling the Hennepin County Assessor’s office.
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