Understanding Changes To The Market Value Homestead Credit (MVHC)

Editor's note: The following is information from the city of Minnetonka.

Although the city of Minnetonka will limit its 2012 property taxes to an , the city only accounts for about one-quarter of a homeowner’s total property tax bill. The remainder is comprised of taxes for your school district (33 percent), Hennepin county (35 percent) and other jurisdictions (7 percent).

For 2012, other factors will have a far greater impact on the property taxes of individual homeowners than the city’s budget. Most significantly, the state made major changes to its Market Value Homestead Credit (MVHC) program. As a result, both property values and property taxes will vary greatly from city to city and even within cities.

Despite the confusing state changes, the reminds taxpayers that they are limiting the 2012 property taxes supporting police, fire, streets and parks to an increase of less than one percent, or about $9 for the average value home ($287,300) in the city. Any tax changes greater than or less than this city increase are due to other taxing jurisdictions, real estate market values, property improvements and, most significantly, state changes to its MVHC program.

Many organizations have created resources to help explain these state changes, like the ones below:

• Video: Why are Minnesota property taxes going up? (By Molly Bloom and Curtis Gilbert, Minnesota Public Radio)
• What’s Going on with My Tax Bill? (pdf) (League of Minnesota Cities)