8 tips that may help lower your property taxes

The feature photo shows Pieter Brueghel the Younger’s oil painting “Paying the Tax” also known as “The Tax Collector.” Public domain photo


 

Michigan 37th District State Sen. Wayne Schmidt (R-Traverse City) recently released a guide for homeowners concerned their property taxes may be too high.

“Occasionally, property owners encounter errors with their tax assessments,” Schmidt said in a Feb. 19 press release. “If residents think there is an inaccuracy with theirs, this free guide will be a valuable resource when considering appealing an assessment.”

 

Schmidt recommended checking for errors on property record cards, and to look over homes for structural damage or problems not associated with general aging that could affect the value of the property.

He said it is also smart to research comparable properties in your area.

If property owners believe an assessment is wrong, an appeal can be made to the local Board of Review (BoR) and, if necessary, the Michigan Tax Tribunal.

Understanding Taxation

The term “taxable value” (TV) was introduced in 1995 and it is the value used to calculate your property taxes.

Annual growth in taxable value is capped at the rate of inflation, or 5 percent, whichever is less.

The State Equalized Value (SEV) must still reflect 50 percent of the property’s true cash value and may increase (or decrease) by more than the rate of inflation or 5 percent in any tax year.

It is important to remember that your property taxes are no longer based on the SEV.

Changes to your home’s assessed value will reduce your taxes only if it is an amount lower than the taxable value.

If you believe your assessment is in error, you may appeal to your local BoR and, if necessary, the Michigan Tax Tribunal. No attorney is necessary.

Property Tax Assessment

For questions regarding your property assessments throughout the year contact the assessing office.

A vast number of questions can be answered and disputes addressed without a BoR appointment.

If you do not feel that you received satisfactory results or have unanswered questions, the BoR is your next step.

  • 1 You may appeal your taxable value and SEV to the March BoR in 2015. Go to your local assessor’s office and obtain a copy of your property record card. Ask the assessing department to explain the document. Check the property record card for errors to make sure it accurately reflects your property. The assessor may make adjustments; if not, you may make your case with the BoR.
  • 2 When you receive your notice of assessment, review it carefully.
    Locate the taxable value and SEV on the notice. If the tentative taxable value increased by more than 1.6 percent above your 2014 taxable value, and you did not improve your home with additions, then your taxable value may exceed the assessment cap. Ask your assessor why the taxable value increased by more than the rate of inflation.
  • 3 Locate the dates and times the March BoR is in session to hear appeals on the notice of assessment and whether you must make an appointment. If you believe your property is unfairly assessed relative to similar property and plan to appeal, you will need to provide market evidence.
    To appeal based on financial hardship, contact the assessor’s office for an application. Applicants must meet requirements for both income and asset levels adopted by the local unit of government.
  • 4 Inspect your home for problems beyond normal aging. Obtain written repair estimates and take photographs to document any structural damage. Obtain citizen complaints of any undesirable characteristics in your neighborhood, such as excessive noise or eyesores.
  • 5 Sales of comparable property are one of the most important tools for a property tax assessment appeal. If comparable properties are selling for less than double your SEV, you may argue that your property is over-assessed.
    Make your comparable study by reviewing sales of local homes. A local real estate agent may be a good resource. To establish commonality, check and compare the square footage, age, and type of house, as well as other features like number of bedrooms and bathrooms. Also check for differences in acreage, street traffic, lake access and presence of outbuildings to make sure your comparables are truly comparable.
    Alternately, you may wish to have your home professionally appraised. However the BoR is not required to accept the appraisal as proof of value.
  • 6 A mistake some home buyers make is failing to inform the assessor of items such as appliances included in a home’s sale price. Inform your assessor in writing about these items as they are exempt from assessment.
  • 7 Check to see if you must complete Form L-4035 (Petition to BoR) or a local form to request an appeal. Put all of your information into letter form (see example). You or a representative must present to the BoR in person at one of the specified times, unless your community allows a letter appeal. Bring photographs and several copies of all documents.
    You may only have a few minutes for a presentation, so be concise, courteous and organized.
  • 8 If you are not satisfied with the decision of your local BoR, you may continue your appeal to the Michigan Tax Tribunal. Find detailed information, including petition forms, requirements, eFiling and FAQ at www.michigan.gov/taxtribunal or call(517) 373-4400.