Tag Archives: Property

The Homestead Market Value Exclusion, MN property taxes going higher.

Minnesota State Capitol

Image by Mulad via Flickr

There are some recent changes to the way the State calculates their tax rates for your property taxes.  We are currently under the Market Value Homestead Credit (MVHC) formula, but  will now be under what they are calling the Homestead Market Value Exclusion.

Basically your property taxes are going up.   The State will longer be covering levies, so the jurisdictions are picking that portion up.  I am still trying get a better understanding of this formula, so I am holding my opinion off until I understand the entire legislation better.  Even though I don’t like the result right now, in the overall picture it might be a better system.  I have thought for years they should scrap the whole “homestead” value all together, because a  House is a House and should be taxed as a House (whether it is rented or owner-occupied, or a vacation house.)

But in the mean time we can go into what it will mean to the Homestead property owner.  The following information comes from the House legislators website. (read full document here)

How It Works
The exclusion provides for a portion of each home’s market value to be excluded from its value for property tax calculations.  The amount of value excluded is directly proportional to the MVHC the home received under the old law.  In this way, each home contributes a smaller amount to each taxing jurisdiction’s tax base.  The tax rate tends to be a little higher because of the reduced tax base, which is why taxes increase for the other types of property.   The tax burden on any given homestead could be lesser or greater depending upon the mix of properties in the jurisdiction (more nonhomestead properties increases the likelihood that homestead taxes will be reduced and vice versa) and the level of the tax rate (higher tax rates make it more likely that homestead taxes will be reduced and vice versa).

Rather than pasting the entire document, I will jump to the visuals of what this means to the Homestead owner.  Below is how the Calculations used to work, and how they will work.  If you are anything like me you will re-read this 14 times and still be scratching your head.

Homestead Market Value Exclusion - How it's calculated

Below they put it to a “practical” demonstration, making it more understandable.  Let’s get to the point, we are looking at about 4.24% increase on our property taxes according to their sample.

Homestead Market Value Exclusion sample property tax calculation

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Filed under Property Value Series

Minnesota property taxes heading higher

Minnesota State Capitol

Image by Mulad via Flickr

Stumbled upon this article on Kare11 and thought it would be worth sharing.  This certainly will not help with the homeowners struggling to make their payments..  I wonder if this will increase the foreclosure rate??  It certainly will put an added strain on property values depending how big of tax increase we actually see.

It leaves me with one question, if St Paul increases their mil rate by 6% and Minneapolis by 2%, then if you add in the States mill rate increase by another 6%….  Where are the School Districts??  How much of an increase are they going to be asking for?  Let’s go for the trifecta while we are at it.

Article from Kare11:

The Homestead Market Value Credit – a $261 million pile of money set aside each year for property tax relief – is gone.

In its place legislators and Governor Dayton agreed to a new system that excludes a percentage of a home’s value from property taxes, up to $414,000.  A sliding scale favors homes with lower valuations….

….So what kind of numbers are we talking about? Researchers for the Minnesota House of Representatives applied the new system to last year’s numbers and found property taxes statewide would have spiked by an additional 3.3 percent under the changes.

The simulation showed property tax increases would have ranged from a high of 6.7 percent in Southeastern Minnesota towns, to a low of 1.6 percent in southeast and southwest Hennepin County.

What is potentially destructive is the mention of shifting more of the tax burden onto apartment housing and commercial properties.  I can’t possibly imagine how that will help business’s hire more employees…

… for instance, your city has a lot of offices and large businesses – as a homeowner you’ll get a break. In cities like Minneapolis and Bloomington, property taxes can be shifted to apartment houses, office towers and factories, off-setting homes.





Filed under Uncategorized

Commercial Real Estate Market compared to Residential (case shiller)

This is a great visualization from calculatedrisk blog.  The commercial real estate market is tracking about 18 months behind residential.  Commercial Property Price Index vs. Case Shiller.  So what my question is:  In order for the Residential Market to recover, we need jobs. The primary purpose of Commercial property is commerce aka Jobs.    So which market will recover first?  Residential or Commercial??   Thoughts?

Also another question comes to mind – had we not interfered with the residential market (government intervention) would the Case Shiller index bottomed out like the CPPI?  Was it really worth it?

CPPI vs. Case Shiller (calculatedrisk blog)


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City of Plymouth Mosque. Zoning

This mosque proposal has certainly gotten a lot of attention, so I thought I would gather some general information on this.  unfortunately the Minutes from the Planning Commission meeting are not yet published online, so I will go with what is available right now.

  The property the mosque is looking at building on is located on the old Post Office site across from City Hall.  It consists of approx 2.54 acres and is listed for sale at $800,000.

The current Zoning Map, the Property is CC-P (City Center Public)  Based on the City of Plymouth‘s Zoning and their Zoning Guidelines for CC-P, rezoning wouldn’t have to take place – it depends on how you define Community Center.  According to Plymouth’s Zoning, Community Center is defined as:

A Building or room or group of rooms within a building designed specifically as a gathering place for the general public or for a specific sement of the general public and operated on a non-profit basis.  (source: Plymouth Zoning Ordinance)

That sounds to me like a religious gathering place would be permitted by the zoning. (Church, Synagogue, Temple and Mosque – did I leave anyone out?).

Here is the Zoning Guidelines for CC-P in Plymouth:  (can also be found on Plymouth’s website)


The following are permitted uses within the CC District:

Subd. 1.


(a) Amphitheaters.

(b) Bus/transit stations or terminals without vehicle storage.

(c) Commercial recreation, indoor (e.g., bowling alleys, roller rinks).

(d) Community centers.

(e) Essential services not including structures, except those requiring administrative permits or conditional use permits pursuant to Section 21160 of this Chapter.

(f) Governmental and public utility (essential service) buildings and structures, including public works type facilities, excluding outdoor storage.

(g) Parks and recreational facilities, structures and buildings.

(h) Publicly owned civic or cultural buildings such as libraries, city offices, auditoriums, public administration buildings and historical developments.

(i) Sports and fitness clubs.

(Amended by Ord. No. 2002-32, 11/26/02) (Amended by Ord. No. 2005-01, 01/11/05) (Amended by Ord. No. 2006-04, 02/07/06) (Amended by Ord. No. 2007-28, 11/13/07) (Amended by Ord. No. 2009-07, 05/12/09)

The City does not exactly have a track record of following their “Zoning”.  They have time and again turned people down on proposals that fit within in the zoning requirements by coming up with other “objections” that can’t always be quantified.  A recent disregard for property rights was the denial of Wal-Mart’s proposal on 169 and 9 recently, they fit within the zoning requirements and were still turned down.  So it is anyones guess what will happen with this proposal.

I am a huge proponent of Property Rights.  If the use fits within in the City’s Zoning laws, than it should be permitted.  Whether or not neighbors object it, and whether or not I object to it – it is the Owner’s Rights to do with their land what they see fit (within the law – Zoning being one of them)

If people really object to the mosque or Wal-Mart being built, then they should buy the property and do with it what they think should be put there.

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Filed under real estate, new construction, development, wayzata real estate, foreclosures, economy

Time to buy rental properties?

After looking at the stock market crash, this is really looking to me like the safest place to put money right now…

Buy some homes for rental properties.  (on the right column – use my spreadsheets to analyze rental properties to see if the investment makes sense for you.)

Star Tribune Article on rental vacancy


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