AD Valorem – a Latin phrase that means “according to value”, used to refer to taxes that are based on the value of property.
Use Classification – The statutory classification that has been assigned to your property based upon your use of the property. For example, residential versus commercial. Classifications pay different tax rates, which are set by the Minnesota State Legislature. A change in classification of your property can have a significant impact on the amount of tax you pay.
Estimated Market Value – This value is what the assessor estimates your property would likely sell for on the open market.
Taxable Market Value – This is the value that your property taxes are actually based on, after all reductions, limitations, exemptions and deferral. Your Taxable Market Value, along with the use classification rate and the tax rates that apply to your property, will determine how much you will pay in taxes.
Limited Market Value – Limits how much the Taxable Market Value (not the Estimated Market Value) of certain properties can increase. This only applies to agricultural, residential, timberland, or noncommercial seasonal recreation residential (cabins) property and may change from year to year or be eliminated as determined by the Minnesota State Legislature. Note: This limitation was expired by legislation after 2009 taxes payable.
New Improvements – This is the assessor’s estimate of the value of new or previously unassessed improvements you have made to your property. These improvements are not eligible for Limited Market Value.
Real Property – refers to the rights, interests, and benefits connected with real estate. The rights include the right to occupy the real estate, sell it, enter it, give it away, borrow against it, or to exercise any one or all of these rights. Property taxes for real property are based on the previous year’s assessment. For example, real property is assessed in 2016 for taxes payable in 2017.
Real Estate – can be defined as the Land or any Improvements to the land. Real Estate is fixed and immobile.
Land – is considered to the earth’s surface (land and water) and anything that is attached to it. This includes mineral deposits, timber, etc. It also includes any improvements made to the land such as clearing and grading.
Fixtures – are items that alone could be considered personal property, but when they are attached to the land or buildings, they become part of the real estate and thus add value to the property. For example: a deck that is not attached to the house but is attached to the land via footings should be considered as part of the real estate.
Personal Property – can be defined by exception in that anything that is not real property is personal property. The main characteristic of personal property is that is is movable. If it is movable without causing damage to itself or the real estate, it considered to be personal property. For example: hot tubs located on a slab outside of a house or small metal sheds that are easily dismantled and moved.