Minnesota Cabin Owners Prepare for Tax Hikes in 2010
The Limited Market Value Program (LMV), a program that benefited lake property owners in Minnesota by limiting property tax increases since 1993, has come to an end with the end of 2009.
Although this program limited property tax increases and put a cap on how much of a property’s value could be taxed, the taxable value of the property still continued to rise rapidly over the past few years. This means there is a great difference between how lake properties have been taxed and the actual taxable value. As a result, many lake cabin owners must prepare to pay a considerably higher amount in property taxes this year than the amounts they have gotten used to. According to Minnesota Public Radio, one cabin owner found her property taxes increased by 44%, and another property owner’s taxes rose as high as 130%.
The Limited Market Value Program not only benefited lake cabin owners, but also farmers. Both types of property owners will be hit hard, but the lake cabin owners fall into a category of real estate that increased the most in value these past few years, so they will be experiencing great shock.
There has been a note on property tax statements every year that explained the change was coming, but it has still caught many property owners off guard. The system is hard for the average person to understand.
Many cabin owners, especially those that are retired and living on a fixed income, are now faced with the tough decision to sell their family cabin or to hold on to it and adjust their budget to pay the higher tax rates. For other cabin owners, this tax increase is more of a nuisance and simply another extra expense. No matter which cabin owner you are, be prepared for a tax hike and inform your friends and neighbors about this change, so they can plan and prepare for the increase as well.
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