The assessor determines the classification or use of each parcel. For instance, property may be residential homestead (owner-occupied), residential non-homestead, agricultural, or commercial. Each classification is taxed at a different percentage of market value. These percentages are set by the state legislature.

Read Property Tax Manual - Module 3 (PDF) and Agricultural Homesteads First-Tier Valuation Limit from the Minnesota Department of Revenue for additional information.