County wide, the assessed value of agricultural land will increase 20 percent for the next year, according to Stearns County Assessor Gary Grossinger. That compares with a 32 percent increase for the assessed market value for lakeshore property in Paynesville Township. Nonlakeshore property in Paynesville Township should increase about 10 percent.
Those percentages are just averages. Actual assessments consider a variety of factors, whether the property is seasonal, the house style, its location, and the size of the property. So, for example, since two-story houses are selling better than ramblers, their new assessments should be slightly higher. "Everything is on computer, so we can run ratios on almost any type of property or house," said Grossinger, of his office's ability to discriminate the assessment to each piece of property.
The assessment is based on a comparison of actual selling prices with the previous assessed market value. For the comparison, only open market sales are considered. Sales by banks or within families are not considered. "An arm's length sale has to be between a willing buyer and a willing seller," said Grossinger.
Farm land is considered county wide, without regard for location, according to Grossinger. On average, assessed values should raise about 20 percent on farm land. That is based on 55 sales in the past year, where the previous market value accounted for only 78 percent of the average actual sale prices. The goal in assessments is a ratio of at least 95 percent.
Grossinger said the increase in assessed market value on farms is a new trend, as the assessments had been relatively stable in recent years. He called it unusual that commodity prices are low, but agricultural land is increasing in value. "It seems to be farmers buying farms," he said of the 55 sales in the county.
Hobby farms, parcels of 50 acres and less, should increase by 25 percent or 30 percent, according to Grossinger.
Lakeshore property continues to rise in value. "Any district that has lakeshore has seen double digit increases the last five years," Grossinger said.
Based on nine sales in 1999, the assessed market value of lakeshore property in Paynesville Township should increase about 32 percent on average. In Eden Lake Township, lakeshore property will increase about 18 percent, based on 23 sales in 1999.
For nonlakeshore property, the approximate increase is 10 percent in Paynesville Township (20 sales) and 13 percent in Eden Lake Township (seven sales). In Munson Township, the average assessment, based on 29 sales in 1999, will increase about 12 percent.
Townships like Lake Henry, Spring Hill, St. Martin, and Zion did not have enough sales to determine market values in each township. Grossinger said some of these townships could be compared with each other and expected their assessments on residential homes to increase about 10 percent.
Based on 39 sales, the assessed market values in the city of Paynesville will increase by just over one percent. Values in the city of Richmond (27 sales) should be up three percent, and in the city of Eden Valley (nine sales) up 30 percent.
Cities like Lake Henry, Roscoe, St. Martin, and Spring Hill didn't have enough sales to use the ratio without adjustment. Roscoe had no sales in 1999, and Lake Henry just one, which indicated a need for a 73 percent increase, according to the formula. Lake Henry should see an increase, said Grossinger, but not near 73 percent.
Property in the city of St. Martin will also see an increase. Values in the city of Spring Hill actually dropped, but there were only two sales, so property owners shouldn't expect relief.
The increase in assessed market value does not automatically mean a tax increase. Property taxes are divided among the entire tax base. So, if everyone's property increases by the same value, everyone's tax burden should remain the same.
However, if your assessed value increases more than the average, you will assume a larger tax burden. "If you're the only one that goes up and the rest stays the same," explained Grossinger, "your taxes will go up."
Also, Stearns County uses a limited market value increase for tax purposes. No matter what the actual increase in assessed market value, the increase on residential, seasonal, or agricultural property for tax purposes can only be 8.5 percent per year. However, the tax value would increase by 8.5 each year until the assessed market value is reached.
The exception is commercial property, which is not limited for tax purposes. Any increase in commercial property value will be considered for tax purposes.
In the 2001 assessment, Grossinger said the county hopes to establish a green acres program, which would limit the taxable value on agricultural land. Even if the assessed market value of the land keeps rising, you will be taxed at a rate that values the land for farming purposes. "As long as you're farming," said Grossinger, "you'll pay a farm rate."
Under the green acres designation, when someone wants to sell, he or she would need to pay three years of back taxes at the full assessed rate.
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