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Saturday, February 19, 2011

How To Appeal Your Property Taxes

While it is good news that Appraisers are finally beginning to show this area as “stable,” overall, property values fell again last year.


Is this reflected in your property taxes?

Soon, you will be receiving your Notice of Assessment in the mail. It is absolutely critical for you to review this Notice as soon as it arrives. You may want to challenge this assessment, but first a primer in

PROPERTY TAX BASICS:

Real estate in Michigan is given two values in the property tax system:

  1. True Cash Value – is established annually on December 31st. Assessors do this by reviewing sales data for each neighborhood over a period of time looking for trends and applying a percentage of increase/decrease for each neighborhood. This, along with actual physical changes to your property, creates Market Value. Fifty percent of this equals your State Equalized Value (SEV).
  2. Taxable Value (TV) – is your SEV modified by the limitations on increases set forth in Proposal A (the Headlee Amendment). This means that your TV can never exceed your SEV. This law is meant to keep you from being affordably taxed out of your house.

HOW YOUR PROPERTY TAX IS CALCULATED:

• Multiply the tax (also known as the millage rate) times the TV of your property.

• As your millage rate goes up and down, so goes your property tax.

HOW TO APPEAL:

• Your Notice of Assessment arrives sometime between February 15 and March 15.

• Timing is critical – call your Board of Review (BOR) and get yourself on their calendar to appeal your tax assessment. There are a limited number of slots, so do this right away.

• It is your BOR and it is comprised of three, six or nine residents of your community. They meet on the Tuesday following the second Monday in March to hear protests of assessments.

• Your BOR has a procedure for appealing your property taxes. Follow that procedure by obtaining the necessary forms and noting any other requirements.

• Go to the Assessor’s office and ask for a copy of your home’s assessment card. Review it with the Assessor to make sure that you completely understand it and that there are no inaccuracies. This is one of the simplest ways to appeal your taxes.

• You must file a petition with the BOR. The State Department of Treasury has the form. It is available online by clicking here. This form requires you to state an estimate of the true cash value and list your reasons for protesting the Assessor’s valuation. I can help you with this.

AT THE HEARING:

• Present evidence to support your cause. Stating that it is too high is not a reason. Ask a Realtor to provide you with neighborhood recent solds supporting that your taxable value (and therefore your property taxes) should decline.

• You can also provide evidence of property issues such as the roof is shot, need a new septic system, fire damage, basement damage and the like.

• Prepare and bring two copies of your report to the hearing – one for the BOR and one for yourself.

• The better your preparation and evidence, the more likely you are to win.

WHAT CAN HAVE AN AFFECT ON YOUR ASSESSMENT:

• Value goes up or down for the neighborhood

• Physical changes to the property (good or bad), improvements or damage

• Millage goes up or down

• Location, location, location is the single most important factor which determines the value of your home. Do you live within close proximity to a major road, landfill, business, industry or highway?

RESULTS:

• The BOR will review your evidence and make a determination of your new SEV and TV. It will usually not be at the hearing, but you will get a determination within a reasonable time period. Ask politely.

• If you feel the BOR’s decision was fair, your appeal process is finished. If not, you may want to file a formal appeal with the State.

Stay tuned for more information . . .

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