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County staff warn 2025 property-tax impacts depend on levy choice and exclusion changes
Summary
Hennepin County staff presented preliminary 2025 assessment trends showing modest countywide market-value growth but shifting tax capacity from commercial/apartment sectors to residential; staff outlined three levy scenarios (4.5%, 5.5%, 6.5%) and said the expanded homestead exclusion will materially reduce taxable value for many homeowners.
Hennepin County officials told the Administration's Operations and Budget Committee on Aug. 13 that countywide estimated market value for 2024 (for 2025 taxes) shows gross growth of about 1.1% but net growth (excluding new construction) of about -0.5%.
"Gross growth inclusive of new construction, we're at 1.1% up countywide. If we take out that new construction, we're at a negative 0.5%," said Josh Hoagland, County Assessor. Hoagland displayed sector-level breakdowns showing downtown Minneapolis commercial values falling more sharply than suburban commercial, while residential values rise modestly in many areas.
County Administrator David Huff and Chief Financial Officer Joe Matthews said that three preliminary levy scenarios (4.5%, 5.5%, 6.5%) were prepared to illustrate homeowner impacts by city. Matthews emphasized that the recently expanded homestead market-value exclusion—adopted by the state legislature—will reduce taxable value for many homeowners (largely those with homes below roughly $500,000) but that declines in commercial and apartment tax capacity shift a larger share of the levy onto residential property.
"What you will see as we go through this, is that's a positive for homes that are below... roughly about $500,000," Matthews said when describing the exclusion's benefits for lower-valued homes. He added that apartments' share of the property-tax levy is projected to drop (from about 12.8% to 12.3% in the county-level projection) while residential share edges up (roughly 62% to 62.6%).
Huff and staff cautioned that the numbers are preliminary. Huff noted the administration will present the proposed operating and capital budget on Sept. 10, the board will set a maximum levy under state statute on Sept. 17, and a truth-in-taxation public hearing and final levy adoption will follow in December.
The presentation included a multi-page homeowner-impact packet by city that county staff said they will deliver to commissioners; that packet shows the median-home dollar change under each levy scenario and illustrates how the exclusion phases out for higher-valued homes.
Next steps: staff will produce final property-tax data and updated homeowner-impact materials before the September budget briefings and the statutory maximum-levy action.
