An out-of-state buyer closing on a home in Wayzata in late October found this out the hard way this year. The purchase agreement looked clean. The inspection was fine. Then the closing disclosure arrived with a property tax credit line that didn't match anything the buyer's agent back home had prepared them for, because Minnesota splits its property tax bill into two payments, due May 15 and October 15, and a closing that lands close to either date changes how much cash actually needs to show up at the table. The seller had already paid the first half. The buyer owed reimbursement for the second half, prorated by the day, on a bill that wouldn't be finalized until months after the sale closed.
That mechanic alone catches people off guard every fall. But it's a small problem compared to the bigger one hiding underneath it: almost nobody comparing Twin Cities suburbs this year is comparing the right number.
The Number in the News Is Only Part of Your Bill
If you've been reading local coverage while shopping suburbs, you've seen the headlines. Wayzata's city council spent most of 2025 wrestling its preliminary levy down from a proposed 14.9% increase to a final 4.9%, a fight Mayor Andrew Mullin had campaigned on and one the council debated publicly through the summer before landing on the smaller number in December. Minnetonka settled at a 7.91% increase. Edina's council floated a maximum increase as high as 11%. Hennepin County itself adopted a 7.79% levy increase for 2026, while neighboring Ramsey County proposed an even steeper 9.75%.
Read those numbers side by side and Wayzata looks like the bargain of the bunch. It isn't, because none of those percentages describe your whole bill. Each one describes a single layer of it. A Minnesota property tax statement stacks county, city, school district, and any special taxing districts on top of each other, and each government sets its own levy on its own schedule. In Wayzata's case, the city government's own reporting puts city government at just 19% of a typical resident's total property tax bill. The other 81% comes from Hennepin County, the school district, and other taxing authorities, none of which softened their numbers just because the city council did.
So when a relocation buyer hears "Wayzata only went up 4.9% this year" and assumes that's their total tax exposure, they're comparing one slice of the plate to someone else's whole meal. The city fight that dominates local news coverage every fall is real, and it matters to residents who show up at truth-in-taxation hearings. It just isn't the figure that determines what lands in your escrow account.
Same City, Different Bill
Even within a single suburb, one levy percentage doesn't land the same way on every home. Shorewood's city council approved an 8.6% levy increase for 2026, a routine-sounding number. But the city's own finance director told the council that roughly 19% of Shorewood homes will actually see their property tax bill go down next year, about 56% will see an increase of 10% or less, and around 25%, concentrated along Lake Minnetonka, will see an increase larger than 10%.
That spread exists because the levy percentage only sets how much total revenue the city collects. What each individual homeowner pays depends on how their property's assessed value moved relative to everyone else's. Lakeshore parcels in Shorewood have been reassessed upward faster than inland parcels, so the same city budget vote produces very different outcomes depending on which side of the road your future home sits on. A buyer comparing "Shorewood's levy" to "Deephaven's levy," where the city council approved a 9.95% increase on a $4.68 million total levy, is comparing two numbers that already obscure more than they reveal before you even get to your specific parcel.
Here's how the current levy picture breaks down across the suburbs most relevant to lake-corridor buyers, based on the final or most recently reported figures for 2026:
| Jurisdiction | 2026 Levy Change | Status |
|---|---|---|
| Hennepin County | 7.79% | Final |
| Ramsey County | 9.75% | Proposed |
| Wayzata | 4.9% | Final |
| Minnetonka | 7.91% | Final |
| Edina | up to 11% | Proposed maximum |
| Shorewood | 8.6% | Final |
| Deephaven | 9.95% | Final |
None of these numbers, on their own, tells you what a specific house will cost to hold. They tell you how much a specific government is asking for. Your actual bill is the sum of several rows in this table plus your school district, and your share of that sum depends on your home's assessed value relative to your neighbors', not on which city council fought hardest at budget hearings.
The Exclusion That Disappears Right Where You're Shopping
There's a second layer that matters even more for buyers looking at move-up homes and lake properties, and it rarely comes up in local coverage because it isn't a headline number. It's the Homestead Market Value Exclusion, a state program that reduces the taxable value of an owner-occupied home. A home valued at $76,000 gets the maximum exclusion, $30,400 knocked off its taxable value. That exclusion shrinks as home value rises, and it disappears completely for homes valued above $414,000.
That threshold sits well below the median price of a single-family home across most of the Lake Minnetonka corridor. It means a buyer moving from a $350,000 starter home into a $700,000 or $1.2 million property in Wayzata, Deephaven, or Excelsior isn't just paying tax on a bigger number. They're paying tax on the full number, with none of the state-subsidized cushion that lower-priced homes elsewhere in the metro still receive. Two buyers can watch the same city levy percentage tick up by the same amount and feel it completely differently, because one of them cleared the exclusion cliff years ago and the other never had it to begin with.
This is also why statewide averages are close to useless for anyone shopping this specific market. A statewide effective rate blends townships where the exclusion still applies with lake suburbs where it never did. The rate itself isn't wrong. It just isn't describing the neighborhood you're touring on Saturday.
What This Actually Means If You're Comparing Suburbs
None of this means Wayzata is secretly expensive or Deephaven is secretly cheap. It means the headline percentage from a single city council meeting is the wrong tool for comparing what two suburbs will actually cost you to own in. A few things are worth asking for instead of a levy percentage:
- Ask your agent or title company for the property's actual 2026 tax statement, not last year's, since assessed values shift every year and the statement reflects the real total across every taxing authority.
- If you're comparing two specific homes, ask how each one's assessed value moved over the past two reassessment cycles, not just what the city levy did.
- If either home is priced above roughly $414,000, factor in that the homestead exclusion won't reduce your taxable value at all, regardless of what a lower-priced comparison home elsewhere might receive.
- If your closing is scheduled near May 15 or October 15, ask your title company to walk through the proration math before you sign, since the credit or debit at closing depends on exactly which half of the year's taxes has and hasn't been paid.
A city's levy fight makes for a good local news story every fall. It's just not the number that should decide which suburb you choose or what you budget for closing.
A Few Questions Buyers Ask
Does the buyer or the seller pay property taxes at closing in Minnesota? Both, in a sense. Property taxes are prorated based on how many days each party owned the home during the current tax period, and the specific amount owed depends on whether the first or second half of the year's bill has already been paid.
Why did my future neighbor's tax bill go up more than mine if we're in the same city? Because the city's levy percentage only sets total revenue collected. Your individual bill depends on how your home's assessed value moved relative to every other home in the taxing district, which is why lakeshore parcels and inland parcels in the same suburb can see very different changes in the same year.
Is a lower city levy percentage always a better sign for buyers? Not on its own. City government is typically a minority share of a total Minnesota property tax bill, with the rest coming from the county, school district, and any special taxing districts. A low city number can still sit on top of a much larger county or school increase.
If you're comparing carrying costs across the lake corridor and want the full picture instead of just the headline number, Polovitz Group can walk through the actual tax history on specific properties you're considering, not just the percentage that made the news this fall.
