Property's use and classification may be considered in property valuation. (Cases in Brief).
In 1975, Michael Weed purchased an old house on three acres of land along a branch of a river for $1,000. The house, which Weed restored and eventually made his home, is serviced by a well and septic system. Access to the property is by permanent easement. In 1983, the local township vacated a township road that provided access to the property. In exchange for a permanent easement over neighboring land, Weed agreed not to sue the township for any loss of value to his property resulting from vacation of the road. Weed currently accesses his property by a bridge that he built over the river. For tax purposes, two of Weed's acres are classified agricultural and one acre, the home site, is classified agricultural homestead. The assessor valued the agricultural acres at $450 each, which Weed did not contest. He did, however, contest the $8,000 valuation of the agricultural homestead land. The tax court upheld the valuation relying heavily on the sales comparison approach. Weed appealed.
On appeal, Weed argued that the tax court erred by considering use and classification of the subject property to estimate its value. The court said that Weed ignored the legislative mandate that for tax purposes agricultural property and agricultural homestead property are to be classified and valued separately and that the land and dwelling of an agricultural homestead are to be valued separately. "Not only does relator [Weed] ignore the legislative mandate," the court said, "he ignores the reality that agricultural homestead land has greater value than bare agricultural land." The tax court decision was affirmed.
Weed v. County of Filmore
Supreme Court of Minnesota
July 26, 2001