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Posted on: June 21, 2022

Council Perspective: Impacts of property valuation increases

House

By Mayor Anne Burt

Woodbury homeowners received a property valuation notice in the mail from Washington County in March. Many of you likely noticed the spike in your property's value - the median 2022 residential property value in Woodbury increased by 19.3%. While this might seem substantial, it is actually in line with residential property value increases across the metro. 

Increasing property values is a good thing for all property owners - it adds to our personal wealth. From a community perspective, growth in the tax base also has a positive impact from a property tax rate and a business return-on-investment perspective. However, there may be some misunderstanding over how these increases may affect property taxes. I want to share more about the property valuation process and the impact of value increases.

First, property values are independently determined by Washington County annually. The City of Woodbury has no role in this assessment process.

Secondly, each taxing entity sets only their property tax levy, which is the amount of money each entity needs from property taxes for the upcoming fiscal year. There are three major property taxing jurisdictions levying property taxes. In any given year, the City of Woodbury's and Washington County's portions of a residential property tax bill each typically represents about 25% of the total property tax bill (about 50% total), with your school district and other taxing districts receiving the remaining amounts, depending on where you live in Woodbury (these numbers are based on a property in School District 833). 

Third, the degree of change in the city's portion of property taxes will be impacted by the level of increase or decrease in property value compared to the median property value change. Woodbury properties experienced a $2 billion increase in assessed value from 2021 to 2022. While the tax base has significantly increased, the property tax burden at the property level does not automatically go up or down correspondingly with property value. For example, the property value of the median value residential property in Woodbury increased by 19.3% for 2022. That means if your property value increased by more than 19.3%, your chances of experiencing a property tax increase in 2023 is higher. However, if your property value increased by less than 19.3%, the change in property taxes that you pay will be less than the average homeowner. So, in sum, a significant increase in property value does not result in a corresponding increase in property taxes. 

Calculating property value

The property value function is governed by Minnesota State statutes, which establish specific requirements for the assessment of property. The law requires that all real property be valued at market value, which is defined as the usual or most likely selling price as of the Jan. 2 assessment date.

The estimated market values are established through the 2022 Washington County assessment based upon actual real estate market trends of Washington County properties from Oct. 1, 2020, through Sept. 30, 2021. Individual property values are determined from these trends. Assessors look at the sale price of similar properties, the neighborhood, number of bedrooms and bathrooms, size and quality of the building, recent improvements to the property, and the condition of the property to make sure valuations are fair and that properties in Washington County are valued and classified uniformly and accurately. 

While the deadline has passed to make changes for this year's valuation, each spring property owners who have questions or concerns regarding the market value set for their property are encouraged to contact the property appraiser assigned to their area.

The other option for appealing your value is to attend any of the four regional Open Book meetings scheduled by the county each spring. 

Property owners who are not satisfied by speaking with the assessor's office or with the action taken at the Open Book meeting may appear before the County Board of Appeal, consisting of elected county commissioners, the county auditor, and/or appointed officials. 

Also keep in mind that a Property Tax Refund and/or Homeowner's Homestead Credit Refund are available through the Minnesota Department of Revenue. Learn more about property tax refunds.

If you have any questions regarding the appraisal process or the 2022 market value, contact the Washington County Assessor's Office at 651-430-6175 or visit the Washington County Assessor's Office website.


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