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Board of Appeal and Equalization Handbook Classification In Minnesota, property is classified according to its actual use on the assessment date (January 2 of each year). If the property is not currently being used, it is classified according to its most probable, highest and best use. Property owners do not get to choose how they want their propertytobeclassified.Itistheassessor’sjobto classify The assessor assigns a statutorily-defined property consistent with Minnesota Statutes, according to its classification to all property based upon the current use or its most probable, highest and bestuse. actual use of the property on January 2 of each year. When determining the most probable, highest and best use for a Examples of Minnesota property classes include property that is not being used, zoning may be an influencing residential, agricultural, commercial-industrial, factor in the classification of theproperty; however, it is not the apartment and seasonal residential recreational. sole factor. Additionally, all real property that is not improved with a structure must be classified according to its current use or its highest and best use permitted under the local zoning ordinance ifthere is no identifiable current use. If zoning permits more than one use, the land must be classified according to the highest and best use permitted. If no such zoning ordinance exists, the assessor shall consider the most likely potential use of the unimproved land based upon the use of surrounding A principle of appraisal and assessment requiring that land or land in proximity to the unimproved land. each property be appraised as though it were being put to its most profitable use (highest possible Property classifications are defined in Minnesota Statutes. present net worth), given probable legal, physical and Examples of classifications include residential homestead, financial constraints. residential non-homestead, apartment, commercial, and agricultural. Glossary for Property Appraisal and Assessment, International Association of Assessing Officers, 1997. The board can change theclassification for the current assessment year of any property which in the board’s opinion is not properly classified. The classification must be based on use, and in order for the board to change the classification, the owner must present evidence that the property is used in a manner consistent with the classification he/she isseeking. The board can only change the classification of a property to a classification that is permitted by law. For example, the assessor classifies a property as residential. The owner seeks the agricultural classification. In order for the board to change the classification to agricultural, the owner must prove that the property is used agriculturally and meets the statutory requirements of the agricultural class. It is important to remember that use –not zoning –is the key factor in determining the classification of a property. For example, a property owner has a parcel that is used as an auto repair shop. The assessor has the property classified as commercial. The property is zoned agricultural so the owner is seeking the agricultural classification. Classification is based on use. Since the property is used as an auto repair shop, it is properly classified as commercial. Therefore, the board must vote to uphold the commercial classification. Split-class property A property can have more than one property tax classification if it has more than one use. Such properties are called split-class properties. If this is the case, the assessor will classify the different uses accordingly. For example, when an owner-occupied farm also has a structure that is used as a commercial repair shop for farm equipment, the property is split classified agricultural homestead and commercial. 7