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Last Updated: 8/3/2016

Property Tax Glossary

Abatement – An administrative method of correcting errors in valuation or classification that may escape the review process.

Assessment The accurate and equitable valuation and classification of property to determine its market value.

Circuit Breaker See Property Tax Refund.

ClassificationClassification provides for different types of property to be taxed at different rates. These rates determine a property’s net tax capacity, which is the basis for most property taxes. Your property’s classification is determined based on its use and ownership.

County Program Aid (CPA)A payment to counties from the state of Minnesota to help cover the costs of county services and thereby lower the amount the county needs to collect from property taxes.

CreditA reduction in the amount of taxes due. (Your Tax – Credits = What you pay.)

DeedA written document by which the ownership of land is transferred from one person to another.

Estimated Market Value (EMV) - The most likely selling price of your property, if it were sold on the open market. 

Exclusion Exclusions reduce the amount of taxable value of a property. Most beneficiaries of exclusions have a portion of their value taxable after the exclusion is applied. For example, if your $125,000 home was eligible for a $50,000 exclusion, you would only be taxed on the remaining $75,000 in value. ($125,000 - $50,000 = $75,000 in taxable value.)

Exemption All real and personal property in the state is taxable, except property declared to be exempt by federal or state law. Common examples of exempt property include schools, church property, and federal, state and local public property.

Fiscal DisparitiesThis program is a complex system for the partial sharing of commercial-industrial property tax base among all jurisdictions within two geographic areas. The primary one was created in 1971 for the Twin Cities metropolitan area. A second version was created in 1995 for the Iron Range in northern Minnesota.

Homestead – A classification that reduces the taxable market value on owner-occupied homes of Minnesota residents to encourage home ownership. Classification as a homestead may qualify a property for a property tax refund, and/or other special programs. For more information, download an Applying for the Homestead Classification fact sheet.

Levy A property tax levy is the amount of property taxes collected by a county, city, school district or other unit of government.

Levy Limit A restriction on the amount of property taxes a local unit of government can collect for certain services.

Lien A hold, a claim or a charge a creditor has on a debtor’s lands.

Local Government Aid (LGA) A payment to cities from the state of Minnesota to help cover the costs of city services and thereby lower the amount the city needs to collect from property taxes.

Local Government Spread Levies These levies are the general levies certified by local governments as part of the local budgeting process. They represent more than 70 percent of all property tax levies.

Market Value – The price that could be obtained if a property were sold under competitive, open-market conditions. Assessors are required to value your property at 100% of market value.

Personal PropertyAnything that is not real property is personal property. The main characteristic of personal property is that it is movable without causing damage to itself or the real estate. In Minnesota, personal property is generally exempt, but there are some exceptions. Taxable personal property includes certain utility systems, railroad docks and wharves, certain manufactured homes, and flight property.

Property Tax Refund – This program gives property tax relief directly to qualifying homeowners and renters whose property taxes are high relative to their incomes. For more information, go to Property Tax Refund Information.

Property Tax Statement – The Property Tax Statement is your tax bill. The county treasurer mails these statements to property owners by March 31 each year. Tax payments are due to your county on May 15 and October 15, for most properties.  If you have questions about your Property Tax Statement, contact your county treasurer.

Real Property For the purposes of taxation, real property includes the land, all buildings, structures, improvements, or other fixtures on it, and the right to occupy the real estate, sell it, lease it, enter it, give it away, or borrow against it.

Referendum LeviesThese levies are generally imposed by school districts and approved directly by voters. Cabins and some farm land are exempt from paying referendum levies.

Sales Ratio Study This annual Department of Revenue study looks at property sales across Minnesota to ensure that local assessments adequately reflect the market and are relatively uniform statewide. The study is also used to adjust tax bases to allocate school levies and state aids.

State General Property Tax (Levy)The state general levy is spread statewide. Ninety-five percent of the levy is paid by commercial and industrial property and five percent is paid by cabin property. For more information, download a State General Levy fact sheet.

Special Taxing Districts – Special taxing districts can raise revenue through the property tax, just like local units of government. Examples of special taxing districts are local watersheds, transit authorities, and regional public libraries.

Tax Capacity – A calculation of your share of property taxes based on market value and class rates.

Tax Increment Financing (TIF)TIF is a method of financing real estate development costs to promote development, redevelopment and housing in areas where it would not otherwise occur. TIF Authorities use TIF revenues to encourage developers to invest in new projects, such as constructing new buildings, cleaning polluted areas, or paying for public improvements like streets and sidewalks.

Taxable Market Value (TMV) – This is the value that your property taxes are actually based on, after any deferrals or reductions. 

Truth-in-Taxation (TNT) Notice – The county treasurer mails this notice to property owners in November each year. It describes how your property taxes will change if all of the local taxing entities (county, city, school district, etc.) approve their proposed budgets. It also lists public hearings at which you can voice your concerns about those budgets. If you have questions about your TNT Notice, contact your county treasurer.

ValuationThe process of determining the value of the property based on local market conditions.

Valuation Notice –The assessor mails this notice to property owners in March or April each year. It contains important information about your property and its value and who to contact if you disagree with that value. If you have questions about your Valuation Notice, contact your county assessor.