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By now you probably received your real property tax assessment notice for 2010. If you haven't, rest assured they are in the mail and you will get them in the next couple weeks. If you do not agree with how your municipality has assessed the true value of your property, you have the right to appeal it.
An appeal of a property tax assessment begins at the local level with the board of review. Under Michigan law, the board of review meets on the second Monday in March unless the governing body authorizes an alternative starting date to meet which would be the Tuesday or Wednesday following the second Monday of March.
There are not too many positives to focus on, in the economic condition that Michigan is faced with this, however your property taxes being reduced is one. With declining real estate prices, property owners have a great opportunity to appeal their assessed value.
Homeowners and real property owners who act promptly can appeal the assessed value of their properties and cut a big chunk out of their tax bills. A reduction in an assessment now will ensure that the valuation in the future limits the annual increase to the lower of 5% or the rate of inflation. Your taxable value times your millage rate is what you pay as a property owner.
Is Your Assessment Based On Your Purchase Price?
Keep in mind real property is assessed at 50% of its true cash value, which is the price that could be obtained at a private sale as opposed to an auction or a forced sale. What this means is, just because you bought a bank foreclosure for $200,000 but even in this market it's true value is $500,000, don't expect the city to base your value on the price you paid, because they won't. The assessment should be based on todays true market value.
If you believe the tax assessment for 2010 is greater than 50% of the value of your property, do not miss your opportunity to appeal because it will expire if it is not timely exercised. The first step for homeowners is to file a written petition to your local board of review or personally appear on the date that the board of review meets. This will preserve your right to reduce taxes on your residence for the remainder of the tax year in the event you are not satisfied with the local board’s decision.
Don't Just Show Up, Go Prepared
Now when you go to your local board, you will most likely sit in front of two or three people and have about five minutes to present your case. Don't go there and just tell them "I want my property taxes reduced because the economy is bad," or "I think they should be reduced because home prices are declining." You have to have evidence on why you believe their assessment is high. You need to have data. You can either have an appraisal done or get in touch with a your real estate agent and have them prepare a market analysis showing what has sold in 2009. If you are argueing 2009, all you need is what has sold in 2009 in your neighborhood, or in the surrounding community. Your odds of winning an appeal are much greater if you have data and facts to back up your opinion. The board is not going to do your homework for you, if you have no evidence, you will not get a favorable judgement.
Filing With The Michigan Tax Tribunal
The local board of review will make its written decision on the second Monday in March. If you are not satisfied with the board of review’s determination of your property tax assessment, you may appeal the board of review’s decision by filing a petition with the Michigan Tax Tribunal. There are different deadlines for filing a petition with the Tax Tribunal. For instance the deadline for filing a petition for property classified as commercial property is May 31, 2010 while the deadline for filing a petition to the Michigan Tax Tribunal for residential property is July 31, 2010. Make sure you are aware of the classification of your property in order to meet the deadlines under Michigan law.