Minnesota law directs the assessor to value properties at their market value. This value is sometimes referred to as Estimated Market Value or EMV.The following chart illustrates recent changes in the formula used to calculate Limited Market Value. In 2005, the State Legislature amended the Limited Market Value law so that it is now scheduled to sunset in assessment year 2009, for taxes payable in 2010.
Minnesota law also provides for limitations to the amount of the EMV on which property taxes may be paid. These limitations result in the calculation of two other values, the Limited Market Value (LMV) and the Taxable Market Value (TMV). These figures often appear on property tax statements and are the cause of much confusion to the property owner and the source of many questions to the assessor.
Limited Market Value
Limited Market Value has no effect on the assessor's EMV. Minnesota property tax law imposes a limit to the portion of EMV on which property taxes are to be calculated. This limitation applies to the agricultural, residential, timber, and noncommercial seasonal recreation (cabins) classifications. Added improvements (new construction) do not qualify for this limitation.
A property's LMV may be less than the assessor's EMV. This will depend on the amount of the increase, if any, in the property’s value from one year to the next. LMV is calculated from EMV based on a formula prescribed by State Law.
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Increase to LMV is the greater of:
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Assessment Year
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Tax Payable Year
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Percentage of previous year's LMV
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Percentage of the difference between previous year's LMV and current year's EMV
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2000
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2001
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8.5%
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15%
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2001
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2002
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8.5%
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15%
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2002
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2003
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10%
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15%
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2003
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2004
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12%
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20%
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2004
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2005
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15%
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25%
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2005
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2006
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15%
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25%
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2006
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2007
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15%
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25%
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2007
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2008
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15%
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33%
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2008
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2009
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15%
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50%
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2009
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2010
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No more LMV, property tax based on EMV
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(M.S. 273.11, subdivision 1a)
Taxable Market Value
This is the value that your property taxes are actually based on, after all reductions, limitations (including LMV) and deferrals have been deducted.