Minnesota homeowners brace for property tax sticker shock

Minnesota homeowners are learning how much hefty proposed property tax increases and the decline of office building values will cost them next year.

Why it matters: Many homeowners have been shielded from large hikes over the past decade thanks to booming development and bustling office buildings, but that could change in 2025.

The latest: As required by state law, truth-in-taxation notices began arriving in mailboxes this week and will continue until Nov. 25.

State of play: Cities, school boards, and counties have proposed large increases in their levies. Rising labor costs are a significant driver.

• The city of Minneapolis has proposed an 8.1% hike — the largest in at least 16 years — and the school board passed a maximum hike of 4.5%. Plus, Minneapolis voters approved a new $20 million school technology levy that will add nearly $100 a year in taxes on a median-priced home ($350,000).
• The city of St. Paul and the school board set maximum levy increases of 7.9%.

Zoom out: Some suburban cities and counties are proposing even higher maximum increases: Lakeville approved a 12% increase, Edina's is set at 13.1%, and Bloomington's is at 11.5%.

• Tax levies could rise by 16.9% in Anoka County, 10% in Dakota County, and 8.9% in Carver County.

Yes, but: These are maximum tax levies, meaning elected officials can — and often do — reduce them during the budgeting process in the coming month.

• They must hold public hearings and approve final levies by Dec. 30.

Reality check: Just because your city, school board and county pass a levy increase doesn't mean your taxes will increase by the same percentage.

• The change in your home's value plays a major role, as do other factors like changes in commercial values and city development, which can increase the tax base and spread the burden to more properties.

Between the lines: The value of nearly all office properties in the Twin Cities is declining, so cities like Minneapolis with a larger share of office buildings will feel more pain.

What we're watching: How much elected officials choose to reduce these tax levies remains to be seen.

• In Minneapolis, the mayor's office and all 13 city council seats will be up for grabs in 2025.

Weigh in: When you get your notice, let us know how much your proposed property taxes are rising next year.