The majority of Rosemount residents can expect to pay less in residential property taxes in 2012 than they paid in 2011.
“Most people should see a decrease in the city share of their taxes,” said Jeff May, finance director for the .
Documents from a City Council work session held on Nov. 7 estimate that the owner of a $201,600 homesteaded property will pay $2,473 in total property taxes in 2012 after market value exclusion.
Although actual tax capacity rates are estimated to increase 5.13 percent, the average homestead should see a property tax decrease of approximately 33 percent, said Rosemount Mayor Bill Droste. This decrease is due partially to dropping property values.
According to city representatives, a city tax levy reduction of $529,000 or approximately 5.75 percent will also contribute to the projected property tax decrease. Droste estimates that the median value homeowner will pay $38 less in city property taxes. May stated that the largest decrease in property taxes will most likely be city and school district taxes.
“We know there’s a lot of pain out there in the residential market with property values,” said Droste. “We, as a council, have been working to try not to increase the city side portion we control.”
2012 will also be the first year when Homestead Market Value Exclusion will replace Homestead Residential Market Value Credit. Previously, homesteads with a market value less than $413,800 received a credit, the amount of which varied, depending on the property’s market value.
The credit program was eliminated in July by the state legislature as part of government efforts to close the $5 billion two year state budget deficit. Starting in 2012, instead of each homestead with a market value less than $413,800 receiving a credit, a portion of the homestead’s property value will be excluded from taxation.