Homeowners in the Minneapolis area! You might want to take a seat for this particular one. Taxes are set to increase for you, despite the fact that the value of your home drops. Indeed, you did read that correctly. Furthermore, it is not merely a minor increase either.
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What’s going on?
It has come to light that the values of commercial property in Minneapolis are decreasing, and this includes the palatial office skyscrapers that are located in the downtown area. In addition, when the value of commercial property drops, the owners of residential property are forced to make up the difference. I am referring to you, the homeowner!
How much more will I have to pay?
The mayor wanted to raise taxes by 6.1% at first, but it looks like that won’t be enough now. The Minneapolis Parks and Recreation Board wants the tax rate to go up by 10% next year. Also, don’t forget that Hennepin County and the Minneapolis School Board are going to be putting forward tax plans soon.
Reason why Taxes keep going up
It’s simple: cities need more money to pay for their employees’ pay increases, which are meant to keep up with inflation. For example, Minneapolis police officers are getting a 22% pay raise over the next three years. Public works employees will get a 30% raise during the same period. And park workers will get a 10% raise plus an hourly adjustment of $1.75 for three years.
Any way to ease the pressure?
Steve Brandt, a member of the Minneapolis Board of Estimate and Taxation, suggested that the mayor could ease the pressure on landlords by putting new dates on debt payments at Target Center or using money from a special fund that sends sales tax revenues to various city properties in the city center.
What’s the future look like?
Sadly, it doesn’t look fantastic. High borrowing rates have caused developers to slow down building new units, therefore reducing the tax base income for the city. And years distant is a revival in office tower valuations. Actually, a Moody’s analysis recently projected that office vacancies wouldn’t peak until the end of 2026.
Minneapolis residents thus should be ready for a larger tax load in 2025. Though things are not looking great, perhaps just maybe something will improve.
FAQs
Why are taxes increasing in Minneapolis?
Due to falling commercial property values.
How much will taxes increase?
At least 6.1%, possibly more.
How will this affect homeowners?
They will have to pay a larger share of taxes.
How much are police officers’ pay increasing?
22% over the next three years.
What can homeowners do to prepare?
Plan for a bigger tax bill in 2025.
