Renville County raising assessed value on farmlands by 20% in 2022
There was a higher volume of sales last year than normal in Renville County, Minn., Assessor Doug Bruns reported to County Board of Commissioners.
OLIVIA — Renville County is raising the assessed value of agricultural lands by 20 percent as a result of rising land sale prices.
Doug Bruns, county assessor, reported that the assessed values for both agricultural lands as well as residential properties in the county will rise by at least 20 percent based on sales data from the past year. Bruns provided a look at the rising real estate values to the county board of commissioners at their meeting on Jan. 18.
There were 62 agricultural land sales from Oct. 1, 2020 to Sept. 2021, which is the period used for computing the assessed land values for taxes payable in 2022. The volume of sales represents one of the highest he has seen in his 23 years as assessor, he pointed out. “It’s actually a pretty big number,” he said.
His office has been tracking rising sales prices on agricultural lands for more than a year. The prices really took a big jump after October, he told the commissioners.
Sales prior to October of 2021 showed median values per tillable acre in the range of $7,600 to $7,700.
There were 15 sales recorded after Oct. 1, and they showed a rapid jump to a median value of $9,392 per tillable acre, Bruns told the commissioners.
The prices paid for residential property, both in townships and in communities, rose rapidly last year. There were 32 rural residential sales in the Oct. 1, 2020 to Sept. 2021 period. The sale prices began to cool towards the end of the year. Based on the state formula for calculating the assessed value, Bruns would have needed to raise the assessed value of residential properties by over 25 percent.
The assessor said he was able to make an appeal to the state and the actual assessed value for residential property will likely rise in the 20 to 25 percent range instead. He was able to point out that the price rise slowed at year’s end, and that COVID, relocation and other needs probably unduly influenced the markets earlier in the year.
Agricultural lands represent 88 percent of the land base and value in the county, and correspondingly is responsible for roughly that share of overall taxes paid. Bruns noted that with the rise in residential values as well, the share of the tax burden for residential, commercial and agricultural lands will not likely change much.
The increase in assessed values does not mean that taxes will rise. Bruns said the misconception persists that a higher, assessed value means higher taxes. The reality is that the tax levy — as set by local government entities — is what determines whether taxes rise or not.