What is market value?
Minnesota Statute 272.03 defines "market value" as "the usual selling price at the place where the property...is...at the time of assessment." It is "the price that could be obtained at a private sale or an auction sale, if the assessor determines the price from an auction sale represents an arms-length transaction. The price obtained at a forced sale shall not be considered."
In other words: Market value is the price that would prevail under competitive open-market conditions.
What does the Assessor do?
The law specifically requires that assessors view each parcel of real estate to appraise its market value. Property values change continuously with changing market conditions. In addition to market changes, numerous physical changes affect the value of real estate, such as additions or remodeling.
The assessor also determines the classification, or use, of each parcel. For instance, property may be residential homestead (owner-occupied), residential non-homestead, commercial, etc. Each classification is taxed at a different percentage of market value.
How is market value determined?
View the property.
Value and classification of real estate must be established on January 2 each year. The City Assessor's Office works throughout the year to estimate the market value of each property for the following January 2 assessment.
Approximately every fifth year, an appraiser will view the property. Any property that had a building permit issued in a given year is viewed and its new value calculated for January 2 following the construction.
Gather information.
The appraiser gathers information on all characteristics of the property that affect market value, such as size, age, quality, basement finish, and extra features, such as fireplaces, walkout basements, etc.
Compute value.
The characteristics are entered into a computerized appraisal system. Information on actual sales is updated to reflect market trends, and the computer calculates the property's value.
The market value estimated by the appraiser in this way should be very close to the amount the property would sell for, if placed on the open market.
The State Board of Equalization requires the overall level of assessment to be between 90-105% of market value. The City of Hopkins consistently meets the State Board's requirement.
Analyze sales.
Each year the assessor analyzes actual sales of property within the city. Sales in a 12-month time period preceding the January 2 assessment (from October 1 to September 30), are reviewed to determine 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.
Mail notices.
Notices are mailed out by Hennepin County around the end of March every year. This valuation is the basis for taxes the following year.
Contact at 952-548-6310 for more information.