Looking ahead, Josh Folland, an appraiser for Valbridge Property Advisors, expects Minneapolis and St. Paul homeowners will continue to increase their share of the tax base.
That hasn’t scared away prospective homeowners. In May alone, sellers in both cities on average received more than 101% of their original asking price, according to data from the St. Paul Area Association of Realtors. That meant most, if not all, buyers had to pay more than sellers were asking — despite higher mortgage rates and rising property taxes.
“There’s no new supply being added in great numbers, so it’s a scarcity problem,” Folland said. “I think values are going to keep going up because there’s no geographic expansion area in Minneapolis and St. Paul.”
Several other factors shape an individual’s property tax bill, including local government levies, which are set during their annual budgeting processes. Officials decide how much they’ll need to collect in property taxes to fund services for the coming year.
Each levy is divvied up among taxpayers based on their properties’ assessment and use. A higher assessment doesn’t necessarily mean a higher property tax bill: If everyone’s values grow at similar rates, no one group will take on a larger slice of the levy pie.
Other factors include state policy decisions, exclusions, the metro fiscal disparities program and tax-increment financing.