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40 | Page <br /> <br />Assessment Process: Statutory Requirements <br /> <br />Minnesota law establishes specific requirements for the entire property tax system, including the <br />assessment of property (M.S. Chapter 273). These requirements have not changed during the <br />past year. The laws require the following: <br /> <br />1. All real property is to be valued at market value, which is defined as the usual or most <br />likely selling price at the time of assessment. Special qualified exclusions such as the <br />Veterans’ Exclusion are subtracted from the market value to arrive at the taxable value. <br /> <br />2. Property is classified according to state law, and the tax capacity is calculated. <br /> <br />3. The tax capacity is multiplied by the tax rate (the total of county, school, city, and <br />miscellaneous levies) to determine the amount of property tax. <br /> <br />The annual property assessment focuses on the very first step of this process - establishing an <br />estimated market value for each parcel of property. <br /> <br />Market values are assessed locally by either a county employed appraiser or a locally hired <br />assessor. The work of both county and local assessors is monitored by the County Assessor, <br />whose work is in turn monitored by the Minnesota Department of Revenue. The monitoring <br />agency is authorized by law to adjust the property assessment to help ensure county-wide and <br />state-wide equalization of property assessments. <br /> <br />The County Assessor has established the standard that all Washington County communities, with <br />at least six (6) sales in their sales study, have a community median ratio in the range of 93%-96% <br />of actual market values in relationship to time-adjusted sales prices. At times, local assessment <br />levels have been adjusted by the County Assessor or the State of Minnesota. <br /> <br />State law also requires that each individual property be reviewed by the assessor at least once <br />every five years. Each community has a rotating revaluation schedule to ensure that this <br />requirement is met. <br /> <br /> What is market value? <br />Minnesota Statue 273.03 defines market value as “… the usual selling price at the time of <br />assessment.” The Assessor’s Office works throughout the year to estimate market values of each <br />property for the following January 2nd assessment date. <br />