How to understand and challenge your property taxes in Michigan

How to understand and challenge your property tax assessment in Michigan!
Presented by: Vicky & Jonathan Oltersdorf
Website: www.Oltersdorf.com
Phone: 231-271-7777
E-mail: RealEstate@Oltersdorf.com
Vicky Oltersdorf, Broker Jonathan Oltersdorf, Realtor

When to appeal your taxes?
You own an older home The assessed value reflects a newer home

Notice of Assessment
Mailed to all property owners 14 days prior to board of review
Provides the property owner the opportunity to view their properties assessment for the coming year
Provides an avenue to appeal their assessment
Provides current taxable value amount
Provides current SEV amount
YOUR CURRENT YEARS TAXES WILL BE BASED ON THE FIGURES IN THIS NOTICE

Review Your Notice
Review the dates, times and location of the local board of review.
2. Note your Taxable Value (the value you will be paying taxes on)
3. Note your SEV Value (assessors opinion of the value of your home)
4. The Taxable Value and the SEV numbers will most likely be different unless you have purchased or built your home recently.
Note the percentage of PRE – Principal Residence Exemption- This number should be 100% if this is your primary home. If it is not your primary home it should read 0%.
Strict guidelines have been established for appealing a properties assessment.

Understanding Terminology
Taxable Value = The total dollar value for your home/property that you will be paying taxes on ÷ 2
Example: Home/property with a market value of $200,000
The Taxable Value should not exceed $100,000
Taxable Value x Your Township Millage Rate = Your Yearly Total Tax Bill
State Equalized Value: The dollar value placed on your home/property by the assessor (opinion of average market value) ÷ 2
Example: Home/property with a market value of $200,000
The SEV should not exceed $100,000.

Proposal A
Why are the taxable and assessed values different?
Proposal A of 1994 - Taxable value can only increase by the rate of inflation (CPI), or 5%, whichever is less.
2011 inflation multiplier (CPI) is 1.7%
Why is my tax bill still increasing during this downturn?
Proposal A of 1994 - Your taxable value will increase until it = SEV
If your current taxable value is less than your current SEV Proposal A is saving you money!

What causes a dramatic increase in the taxable value of a home?
Sale of a home – The year after the sale of a home/ property the taxable value automatically increase to the assessors value (SEV) the year of the sale
Change in ownership- adding someone or removing someone from a deed (excludes married couples)
Death of sole owner of a home or property
Improvements to the home
New construction

What causes a dramatic increase in the taxable value of a home?
Example: Home inherited by children after their mother passed away

Reducing Your Property Taxes
Review Your Assessment
Is the taxable value x 2 higher than the market value?
If the answer is YES – YOU HAVE REASON TO APPEAL YOUR PROPERTY TAXES
IF the answer is NO – THERE IS NO BENEFIT TO YOU FOR APPEALING YOUR PROPERTY TAXES UNLESS DETAILS ON THE TAX CARD ARE INCORRECT

What do you do if you feel your assessment is incorrect?
Obtain a copy of your property tax worksheet or appraisal card (from your local assessor) - showing the information the assessor has used to assess your property (sq ft, baths, porch, garage, age, lot size……)
Carefully check the worksheet for errors- Do you have the items listed on the card, is your sq footage correct, etc. Contact you assessor to report any errors you may find on your tax card. The assessor is employed by the Township and should help explain the procedure and be happy to provide the forms and information you are requesting.
Assessors often assess the home from the exterior and may not know that there are errors

What do you do if you feel your assessment is incorrect?
Review the True Cash Value (TCV) of your land and home on the tax card - Do these numbers represent the usual sales price for homes in areas comparable to your home/ property?
If you have recently purchased your property- Confirm the SEV and Taxable Value times 2 is no greater than the purchase price. This will not guarantee a lower assessment but it should be brought up to the board as evidence during your appeal process. Is your PRE % (Principal Residence Exemption) correct?
If you are over assessed you must collect supportive documentation to submit to the Board of Review- It is often the best strategy to hire a state licensed certified appraiser to complete a current appraisal (value of your home/property as of December 31 of the previous year) to be used in your appeal. If this appraisal cannot be completed before the local board of review it may be used for future appeals through the state tax tribunal.

Supportive Documentation
State Licensed Real Estate Appraisers
Official written appraisals by a state licensed appraiser are your best option for obtaining statistical data confirming your properties over assessment. This written appraisal will have a cost associated to its completion ($350 +) with no guarantee that the local board of review will reduce your tax assessment and your bill! If your property is greatly over assessed this cost will be minimal in relation to the savings you may receive if you are successful in obtaining a reduction in your properties tax assessment.
Recent ComparableSales (last 2 years)
Comparables refer to SOLD properties that are similar to your home.
Finished square footage of your home
Unfinished square footage (basements)
Number of baths
Age of the home (a depreciation factor adjustment is placed on the home)
Construction quality – home classification
Garage and outbuildings– size and finish quality
Size of decks, patios, porches
Type of siding and more
Other additional amenities of the home
Land value differences (waterfront, water view, lot sizes, location, topography)

Board of Review
Designated dates, times and location of the local board of review are located on your notice of assessment for in person appeals
If you prefer, you can submit a written petition before the designated dates to your township appeals board
It is not necessary to make an appointment
You will be given the opportunity to present supportive documentation (appraisal, comparable sales) in an informal setting to a 3 member board explaining why your home or property is incorrectly assessed and what you think it is worth
You must submit Michigan Department of Treasury Form L-4025 (Petition to Board of Review) along with your supportive documentation at this time (copies are available on our website)
No decision will be determined on this day
You will receive written notice of the board of reviews decision with any changes in SEV and Taxable Value within 30 days

After the Board of Review
Result
Your taxable value was reduced to an acceptable value
Your taxable value was reduced, but not to an acceptable value
Your taxable value remained unchanged
Next Step
If you are not happy with the result from the local board of review you can try again next year or submit a petition to the Michigan Tax Tribunal.
You must complete an additional form and submit it to the Michigan Tax Tribunal before May 31st . This form can be obtained from your local tax assessor or online at www.michigan.gov
Within 30 days of submission you should receive written notice from the state assigning a docket number to your case
Within 12 months you will receive notice of the scheduling of your hearing with an administrative law judge. The hearing is held within your County
A decision will be made by the administrative law judge after their review of your supportive documentation

Helpful Links
Blank Notice of Assessment, Taxable Valuation, and Property Classification
http://www.michigan.gov/documents/1019_fillable_77355_7.pdf
Petition to Board of Review (must present this at local board of review)
http://www.michigan.gov/documents/l4035f_2658_7.pdf
Principal Residence Exemption (PRE) Affidavit
http://www.michigan.gov/documents/2368f_2605_7.pdf
Request to Rescind Homeowner’s Principal Residence Exemption (PRE)
http://www.michigan.gov/documents/2602f_2607_7.pdf
Conditional Rescission of Principal Residence Exemption (PRE)
http://www.michigan.gov/documents/taxes/4640_231633_7.pdf
State of Michigan Property Tax Appeal Petition Form (for state appeal)
http://www.michigan.gov/documents/PropPetFillable_93020_7.pdf
State of Michigan PRE Petition (if you are denied homestead after board of review)
http://www.michigan.gov/documents/taxtrib/Petition_PRE_2010_320879_7.pdf
Leelanau County Millage Information Chart
http://www.leelanau.cc/downloads/2010_apportionmentwebsite2.pdf
Grand Traverse County Millage Information Chart
http://www.co.grand-traverse.mi.us/Assets/millageReport2010.pdf

Please contact us with any questions!
Presented by: Vicky & Jonathan Oltersdorf
Website: www.Oltersdorf.com
Phone: 231-271-7777
E-mail: RealEstate@Oltersdorf.com
Vicky Oltersdorf, Broker Jonathan Oltersdorf, Realtor

How to understand and challenge your property taxes in Michigan

by Oltersdorf Realty, LLC on Mar 02, 2011

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