Property Assessment Limits

Property tax assessment limitations deliver different levels of tax relief to different parcels; based largely on the owner’s tenure and the parcel’s change in value over time relative to the assessment limit. These parcel-specific assessment limits have implications for the findings of the Minnesota Taxpayers Association’s 50-State Property Tax Comparison Study, which compares tax burdens on hypothetical properties of similar value in different cities. This research explores issues related to the development and application of a methodology to incorporate these effects into the 50-State Property Tax Study. We conclude that we can develop a reasonably robust methodology to incorporate these effects. We conclude that rapid market appreciation combined with relatively stringent limitations exempted between 40% and 65% of residential property value for an “average” homeowner in selected locations in payable 2006. We conclude that revaluation practices should also be included in MTA’s 50-State Property Tax Study since periodic or ad hoc revaluations function as de facto assessment limitations.