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Last Updated: 10/26/2017

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Property Tax Administrators

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Property Tax Administrators > Valuation and Assessment > Sales Ratio and Time Adjustment Information

  • What is a sales ratio?Back to top

    The law requires assessors to value property at its most likely selling price. This “estimated market value” divided by the actual sale price equals the Sales Ratio. The Minnesota Department of Revenue uses this ratio to do studies that ensure uniformity of assessments and equalize state aid distribution.

  • What are time adjustments?Back to top

    Adjustments to actual sales prices to make them timelier. The assessor sets estimated market values according to market conditions as of January 2. However, we collect and study sales information from January 1 of the previous year to September 30 of the following year. Taking into account changing market conditions, we adjust the sales prices from throughout that period to bring them in synch with the January 2 assessment date. Doing that gives us a median that makes our sales ratio more accurate.

  • Why do we need time adjustments?Back to top

    The International Association of Assessing Officers (IAAO) identifies time adjustments as a necessary component of any sales ratio study. Minnesota Statutes, section 270.12, subdivision 2 requires that the department follow the standards set by the IAAO whenever practical.

    Time adjustments are necessary due to the distorting effect that changes in market conditions can have on ratios. For example, if values have been rising in a market and no adjustment is made for time, sales that occur before the assessment date will have higher ratios than sales occurring around the assessment date, overstating the level of appraisal. Sales occurring after the assessment date will have lower ratios and understate the assessment levels. The reverse is true in a declining market. If a disproportionate number of sales occur before or after the assessment date and no time adjustments are made, the median ratio will most likely either overstate or understate assessment levels.​

  • What is MCAST?Back to top

    ​MCAST is the Market Condition Assessment and Statistics Tool that counties can use to replicate the Department of Revenue’s State Board of Equalization Sales Ratio Study. MCAST has the ability to calculate extreme ratios, market condition adjustments, and assessment ratios and statistics. MCAST also features a stratification tool to analyze assessments by different categories. MCAST is meant to be used with the sales listings issued by Data & Analysis.

  • What is the Interest Rate Bulletin?Back to top

    ​The interest rate bulletin documents the rates that the Department of Revenue considers to be the “market rate.” These rates are used to make cash equivalency adjustments for sales on contract for deed and warranty deed for Sales Ratio Study purposes.