Skyrocketing property values in Minnesota leading to big changes in tax rates, housing markets
ROCHESTER, Minn. (KTTC) – Across the nation, property values are skyrocketing.
“Agricultural property is about 22 percent, residential 20 percent, commercial, it varies with the type of property,” said Mark Krupski, Olmsted County’s Director of Property Records and Licensing.
Most of southern Minnesota and Olmsted County is seeing a year-over-year increase of 20 percent.
“Ensure it’s homesteaded. If it’s your principal residence, that can reduce your property taxes by a percentage, by around seven percent,” said Ben Oertli, a tax accountant at Oertli & Pleschourt, LLP.
Though that number may sound alarming, property taxes will not increase by the same rate because they are largely determined by budgets, and budgets are independent of property values.
“I would estimate that I would probably see seven to ten percent, maybe seven to eight percent increase in my property tax,” said Krupski. “That’s an estimate at this point, I can’t really say with any certainty because there are a lot of moving parts.”
These rising values will also have an impact on property tax refunds.
“There is what’s called a special refund, which is when your taxes increase more than 12 percent, so that’s something to be aware of,” said Oertli.
This increase in property value won’t just leave a mark on taxes, as it’s impacting decisions on the housing market as well.
“There are a large amount of buyers out there that need to buy a property. And even with this increase in home values, they’re still gonna purchase properties,” said Chris Schmidt, a realtor with the Schmidt Group at REM/AX Results.
These trends do bode well for sellers.
“We’re seeing record profits right now, record equity,” said Schmidt.
But according to data, it’s making it harder to purchase something ideal even on the outskirts of Rochester. Some properties are increasing by $50,000 in value year-over-year.
“Previously you would get more bang for your buck, but now they’re kind of catching up,” said Schmidt.
With current inflation rates, this looks like a trend that will continue, at least into the near future.
“We’ve seen double-digit inflation on residential property,” said Krupski.
Krupski added that property owners are able to appeal their assessed value at local boards over the next month. For more information, call Olmsted County at 507-328-7670.
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