After the housing bubble burst, many foreclosed properties in Minneapolis sold for bargain basement prices, yet the city is being accused of assessing them at much higher values so as not to lose revenue from property taxes. Of course, the most highly targeted neighborhoods are Near North and Philips. A group of these homeowners, some of them paying taxes based on assessments over 300% higher than their purchase price, are banding together in a lawsuit against the City which may reach class-action status.
On a personal note, while my house isn’t in any of the neighborhoods specifically mentioned in this article, I’m in the same boat as these folks. When I bought a foreclosed property in 2009, it was appraised by HUD at $101K. I bought it for $73K. I think my tax value is still something like $162K. I understand that property tax value assessment is a tricky procedure, but my house will probably never be worth $162K again so it would be nice if I didn’t have to pay taxes on value I don’t have.