Overview of Minnesota Taxes
Property tax rates in Minnesota are close to the national average. The state’s average effective tax rate is 1.17%, compared with a national average of 1.19%.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
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Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Minnesota Property Taxes
In Minnesota taxes on real estate are an important source of revenue for schools, cities and counties. They also serve to fund special local projects like libraries and parks. Tax rates in Minnesota are close to the national average. The state’s average effective tax rate is 1.17%, compared with a national average of 1.19%.
Of course, rates vary depending on where you live. In urban areas like Hennepin County, the average effective rate is more than 1.33%, while more rural areas like Becker County have average effective rates of 0.80% or lower. If you’re thinking about buying a home anywhere in Minnesota or are looking to refinance your current home, check out our mortgage guide for more information on using mortgages for purchasing and refinancing homes in Minnesota. Below, we will dive into the most important Minnesota property tax rules and take a look at rates across the state.
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How Minnesota Property Taxes Work
Wondering how your property taxes in Minnesota are calculated? We’re here to help. There are two types of property taxes in Minnesota: levies based on net tax capacity and market value levies.
Let’s look at levies based on net tax capacity first. To calculate net tax capacity, you first subtract any market value exclusions from your home’s market value. The most common exclusion is the homestead exclusion. The homestead exclusion is available for owner-occupied primary residences. It can be up to $30,400, depending on home value. Homes with a market value of $413,800 or greater receive no homestead exclusion.
Once exclusions have been subtracted, you multiple the remaining taxable market value by the home’s class rate to get net tax capacity. This is the value taxes are applied to. The class rate varies depending on the type of property. For residential homesteads the rate is 1% on the first $500,000 in market value and 1.25% on everything above $500,000. So if your home is worth $400,000, the net tax capacity is $4,000.
Local taxes collected to support ongoing government functions (and not temporary projects) apply to that net tax capacity. Continuing with the above example, if your total local rate is 90%, your taxes from this type of tax would be $3,600.
The second type of tax is a market value levy. These taxes are typically voter-approved and they apply directly to your estimated market value. With the above $400,000 home and a market value tax rate of 0.10%, your additional tax would be $400. Combined with the above $3,600 in taxes, that would bring your net tax to $4,000.
Minnesota Tax Rates
As the above example demonstrates, homes in Minnesota face different types of tax rates from multiple different tax authorities. Homes in one neighborhood could face a 110% total local tax rate on net tax capacity and a 0.20% market value tax rate and homes in the next neighborhood could face a 115% total local tax rate and a 0.10% market value tax rate.
A good way to compare the overall tax burden between counties is to look at average effective tax rates. The average effective tax rate is calculated by taking the median annual property tax as a percentage of the median home value. The table below shows average effective tax rates for every county in Minnesota.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
|Lac qui Parle||$81,000||$877||1.08%|
|Lake of the Woods||$122,400||$1,137||0.93%|
Hennepin County is home to the city of Minneapolis and contains over 20% of the population of Minnesota. Tax rates in Hennepin County are among the highest in the state and somewhat higher than the national average. The average effective tax rate in Hennepin County is 1.33%, second highest in Minnesota.
Property taxes in Ramsey County are comparable to those in neighboring Hennepin County, which sits just across the Mississippi River. The average effective tax rate in Ramsey County is 1.33%.
Total tax rates in Ramsey vary by city. In Saint Paul the total local tax rate is around 150%, while the market tax rate is about 0.135%. That total tax rate applies to net tax capacity, which is just 1% of home value (after exclusions) for owner-occupied primary residences.
Located south of Minneapolis, Dakota County has property taxes that are somewhat lower than those in the other counties of the Minneapolis region. The county’s average effective tax rate of 1.14% ranks as the 25th highest in the state. This is still well below the average rate in both Hennepin and Ramsey Counties.
The median annual property taxes paid by a homeowner in Anoka County are $2,310. That is about average for the state and about $115 above the national average.
This eastern Minnesota County has property taxes below the state average. The average effective property tax rate is 1.08% in Washington County, compared to a state average of 1.17%. At a rate of 1.08%, a homeowner whose home is worth $240,000 would pay about $2,600 annually in property taxes.
St. Louis County
Located in northeastern Minnesota, St. Louis County stretches from the city of Duluth north to the Canadian border. It has some of the lowest property taxes of any county in Minnesota. The county’s average effective property tax rate of 0.97% ranks as the 26th lowest of Minnesota’s 87 counties. Likewise, the median annual property tax payment of $1,393 in St. Louis County is about $1,000 lower than the state average.
Stearns County is located in central Minnesota and contains the city of St. Cloud. The county’s average effective property tax rate is 1.11%. Annual property taxes due on a home worth $170,000 would be $1,887 annually at that tax rate.
Thinking about buying a house in Olmstead County? Homeowners in Olmstead County, where Rochester is located, face an average effective property tax rate of 1.21%. That rate is slightly higher than the state and national averages.
The median annual property tax paid by homeowners in Scott County is $3,066, which ranks as the third highest annual tax in the state. That is in part due to the county’s high home values, however. The median home value in Scott County is over $250,000. That is nearly $60,000 higher than the state median.
Wright County is located between Minneapolis and St. Cloud. Property taxes in Wright County are comparable to those in both cities. The average effective tax rate in Wright County is 1.12%. A homeowner paying that rate would owe $2,240 on a home worth $200,000.
Property Tax: Which Counties are Getting the Best Bang for Their Buck
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most for their property tax dollars. To do this we looked at school rankings, crime rates and property taxes for every county.
As a way to measure the quality of schools, we calculated the average math and reading/language arts proficiencies for all the school districts in the country. Within each state, these schools were then ranked between 1 and 10 (with 10 being the best) based on those average scores.
For each county, we calculated the violent and property crimes per 100,000 residents.
Using the school and crime numbers, we calculated a community score. This is the ratio of the school rank to the combined crime rate per 100,000 residents.
We used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
Finally, we calculated a tax value by creating a ratio of the community score to the per capita property tax paid. This shows us the counties in the country where people are getting the most bang for their buck, or where their property tax dollars are going the furthest.
Sources: US Census Bureau 2015 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites