Minnesota property tax guide

While very few people like paying taxes, they’re an essential source of funding for local governments. If you look at property taxes by state, you will see they can vary a lot from place to place. In general, Minnesota’s property taxes tend to be less onerous than some other states, landing at 17^th out of the 50 states in the nation.

We’ll break down how property taxes work in Minnesota, how much you can expect to pay, and possible options for reducing your tax burden.

How much are property taxes in Minnesota?

Property taxes in Minnesota average 1% as of 2024, the most recent year for which data is available. However, the precise tax rate will depend on where you live. For example, Cass County has the lowest tax rate at 0.59%, while Ramsey County has the highest at 1.19%.

At the average rate of 1%, you’d pay $3,000 per year in taxes on a home worth $300,000. We’ll break down the cost of tax based on the county you live in.

Minnesota property taxes by county

The amount you pay in property tax depends on the value of your home and the tax rate where you live. This table shows the typical tax rate for a county as well as the median home value so you can see roughly how much you’d pay depending on where you live.

How are property taxes in Minnesota calculated?

In Minnesota, the value and classification of your property are used to determine your share of the local property taxes. The formula is a bit complicated because of the numerous factors that influence the final amount you owe.

The precise formula used is:

Base tax - credits + referendum levy and state general tax = property tax due

If you want to get a better idea of how much you’ll pay, you can use a Minnesota property tax calculator.

In general, the more your home is worth and the higher the local tax rate, the more you’ll pay. Keep in mind that your home’s value can depend on many things, including its size, number of bedrooms, the quality of the school district, nearby amenities, and the sales prices of similar homes in the area.

Minnesota property tax exemptions and relief

Minnesota property taxes are lower than those charged in many other states, but that doesn’t mean you shouldn’t take advantage of opportunities to reduce the amount that you owe. Homeowners in certain communities may be able to get deductions or exemptions that reduce their bill.

Some property tax exemptions include:

• Senior citizen. Individuals 65 or older or couples where one partner is at least 65 and one is at least 62 who have lived in their home and homesteaded for at least five years may be eligible for property tax deferral depending on their income. If you qualify, you’ll pay 3% of the total income you received last year or the full tax bill, whichever is less. When you sell or cancel the deferral, you must pay the unpaid tax amount plus interest not to exceed 5%. In addition to Minnesota, there are many states that offer tax relief for seniors.
• Blind or disabled. Blind or disabled Minnesotans may be able to claim an exemption of up to $50,000 in property value, reducing the amount of property tax they owe.
• Homestead. Owner occupants who use a property as a primary residence may qualify for a reduced property tax classification rate, reduced taxable market value, or a property tax refund.
• Green Acres. Owners of agricultural property may qualify for relief if the value of their land is rising due to development or non-agricultural factors.
• Plat Law. Bare land that is platted for development typically sees a significant increase in value. If you own this type of land, the Plat Law phases that higher value in over a period of years, meaning your tax bill will increase more slowly.

Paying Minnesota property taxes

Generally, homeowners have two options when it comes to paying property tax: making payments directly to your local government or having your mortgage lender take payment into an escrow account and send the money to your county on your behalf.

If you opt for the escrow account, you’ll pay your property taxes each month as part of your mortgage bill. Otherwise, property taxes are due annually on May 15^th and October 15^th of each year.

Keep in mind that once you pay off your loan, you still have to pay property taxes and must do so directly to the county. It’s also important to consider that some factors may lead to a property tax increase over time when budgeting for your home expenses.

The bottom line: Minnesota’s property taxes vary by county

Property taxes are an important source of revenue for local governments and help cover the cost of services such as schools, road maintenance, emergency services, parks, and more. If you live in Minnesota, there are many programs available you can explore to reduce your tax bill.

If you’re considering buying a home in Minnesota, or anywhere else, you’ll likely need a mortgage. You can begin your application with Rocket Mortgage today.