Tag Archives: Tax

City of Bloomington lowers Tax Levy


Well this was certainly great news, especially for me since I own property in Bloomington.  The City has lowered their property tax levy for 2012, not by much but at least they are trying.  Given the changes in the Homestead Taxes, I don’t expect to see any actual reduction in the property taxes.  Funny how one takes this with relative nature, “at least it didn’t go up more..”

Bloomington reduced its total City levy despite state changes in Market Value Homestead Credit and relative values between residential and commercial properties. The City Council’s objective is to hold the median value home’s 2012 property taxes for City services at $67.82 per month, the same amount as in 2010 and 2011, with the average value home seeing a 1.45 percent decrease for 2012. See table below.

Property tax cost of services

Levy
amount

Change from
prior yr.

Median value home monthly cost of tax-supported services

Average value home monthly cost of tax-
supported services

2010

$44,606,281

+2.98%

$67.82

$78.01

2011

$44,582,753

-0.12%

$67.82

$79.73

2012
prelim.

$44,441,371

-0.25%

$67.82

$78.58

The property tax dollar levy for a median value and average value home is shown for the past three years. In 2011, the City Council approved a levy decrease. Over the past 20 years through 2011, the average levy increase was 3.24%. 2012 figures are preliminary. It can be reduced but not increased.

2012 median value home – $207,300; 2010 average value home: $235,500.

The City of Bloomington does a fairly good job on explaining why the taxes continue to increase even while our values are decreasing.  If you read this blog you will recognize the flow of this chart from another post of mine comparing the CPI with the FHFA Home Price Index.  The City property taxes seem to be pacing along the track of inflation, give or take.  Our home values are heading back down to keep more in line with the inflation.  Things are balancing back out naturally.

One of the great things about Bloomington is their fiscal responsibility, compared with other nearby Cities.  The only downside is we are still subject to Hennepin County tax levies and Schools district levies.  But for the Twin Cities area, Bloomington offers very nice affordable homes and a relatively low property tax rate.

If you are interested in further detail on The City of Bloomington’s property taxes, the City has published a very in-depth explanation you can read on their website.

If you are considering relocating, I highly recommend you look into Bloomington.  It is a great location within the Twin Cities at a great value.  Contact me if you would like further information about Bloomington Real Estate.

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The Tax Assessor-Should You Let Them In Your Home


It is Property Tax season, the Assessors have been making their rounds valuing the properties and your 2nd Half property taxes are due Friday…

Every year property taxes keep increasing while our values keep dropping.  This coming year most of the Cities property taxes are going up, the State reworked the Homestead Tax Credit to the Homestead Exclusion and to top that off there is talk of many school districts wanting an increase also.  We all feel like victims to this cycle and that there is nothing we can do.  Michael Bolton, a local appraiser has a great post about the process of valuations and the procedures for appealing your property taxes.

Take a few minutes to read his post and ask specific questions about your situation.

The Tax Assessor-Should You Let Them In Your Home

 

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Its not a scam, though it sounds like one Property Tax Information


City seal of Detroit, Michigan.

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Date:� Wed, 09/07/2011 Mike Allende Some Detroit homeowners are taking advantage of a loophole to avoid tax debt, and other homeowners think it�s just plain wrong. The Detroit News reports that some property owners are allowing their

via Its not a scam, though it sounds like one Property Tax Information.

Only in Detroit!  (at least for now…)

 

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Minnesota could lose 2,767 medical device jobs because of a Medical Device Tax


Minnesota State Capitol building in Saint Paul...

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There are 2 problems with our local real estate market, well make that three.

1) the housing downturn nationally (no housing market escaped this)

2) Un-employment (some areas are harder hit than others)

3) Financing regulations, underwriting standards and burdensome regulations. (all housing markets were hit).

For the twin cities, I believe our biggest problem of the 3 right now is the lack of jobs.  It is difficult to buy a home if you don’t have a job, unless of course you pay cash..  It is also scary to the move-up buyers if there is uncertainty with their employment.  As we lose jobs, we lose households and population contributing to even further price erosion (Detroit is an extreme example of this..)  Granted we are not at Detroit’s level and from an unemployment rate we look fairly good compared to the rest of the nation.  Saying “we are not as bad as the other guy” is just a rationalization, we still have a jobs problem.

Minneapolis St Paul Business Journal just published this article about a 2.3% medical device tax enacted by the Federal health care overhaul last year.  The tax is to take effect in 2013 and according to this article we could lose 2,767 medical device jobs.  It appears as if Rep. Erik Paulsen, R-Minn., and U.S. Sen. Amy Klobuchar, D-Minn have been working on eliminating this tax.

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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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Minnesota property taxes heading higher


Minnesota State Capitol

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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.

 

 

 

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Minneapolis property taxes, not so bad??


City hall of Minneapolis, Minnesota (USA).

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More on the Minneapolis Property Tax hike…  Here is a related article on the subject. 

Has anyone stopped to ask, what am I getting for an additional 2% or 4.7% in property taxes?  Are we getting more services?  Is there value in paying more?  As a consumer we have the freedom of choice on whether or not to buy the product.  As a taxpayer, the only freedom we have is to VOTE.

The owner of a $200,000 home in Minneapolis will pay $3,142 in property taxes in 2011. That’s far more than some Hennepin County neighbors, like Edina ($2,275), Plymouth ($2,315) and Orono ($1,860). But a Minneapolis tax bill is less than in Brooklyn Center, where a $200,000 homeowner will pay $3,340 in 2011. 

In 2010, the most recent year of data collected by the LMC, only 15 of 142 metro municipalities had higher property taxes than Minneapolis. 

Since that data was calculated, however, property taxes in Minneapolis have increased by 4.7 percent, though homeowners were hit harder. The owner of a $200,000 Minneapolis home in 2010 paid $2,725 in property taxes, compared to $3,142 in 2011.   Read Full Story from the Downtown Journal

What about for the homeowners who are struggling to make ends meet with fuel and food prices stretching their budgets to a maximum.  Did they all get a pay increase this year where they can easily afford additional monthly property tax payments?

 

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