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How to understand and challenge your property taxes in Michigan


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Vicky & Jonathan Oltersdorf of Oltersdorf Realty, LLC walk you through the steps of understanding and appealing your property taxes in Michigan! The Leelanau and Grand Traverse area real estate agents are knowledgeable in the subject and will help you understand the requirements needed for appealing at your local board of review or at the state level! They have also included many helpful links!

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How to understand and challenge your property taxes in Michigan

  1. 1. How to understand and challenge your property tax assessment in Michigan!<br /> Presented by: Vicky & Jonathan Oltersdorf<br /> Website: <br /> Phone: 231-271-7777<br /> E-mail:<br />Vicky Oltersdorf, Broker Jonathan Oltersdorf, Realtor<br />
  2. 2. When to appeal your taxes?<br />You own an older home The assessed value reflects a newer home<br />
  3. 3. Notice of Assessment<br />Mailed to all property owners 14 days prior to board of review<br />Provides the property owner the opportunity to view their properties assessment for the coming year <br />Provides an avenue to appeal their assessment<br />Provides current taxable value amount<br />Provides current SEV amount<br />YOUR CURRENT YEARS TAXES WILL BE BASED ON THE FIGURES IN THIS NOTICE<br />
  4. 4. Review Your Notice<br />Review the dates, times and location of the local board of review. <br />2. Note your Taxable Value (the value you will be paying taxes on)<br />3. Note your SEV Value (assessors opinion of the value of your home)<br />4. The Taxable Value and the SEV numbers will most likely be different unless you have purchased or built your home recently. <br />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%. <br />Strict guidelines have been established for appealing a properties assessment.<br />
  5. 5. Understanding Terminology<br />Taxable Value = The total dollar value for your home/property that you will be paying taxes on ÷ 2 <br />Example: Home/property with a market value of $200,000<br /> The Taxable Value should not exceed $100,000<br />Taxable Value x Your Township Millage Rate = Your Yearly Total Tax Bill <br />State Equalized Value: The dollar value placed on your home/property by the assessor (opinion of average market value) ÷ 2<br />Example: Home/property with a market value of $200,000<br /> The SEV should not exceed $100,000.<br />
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  7. 7. Proposal A<br />Why are the taxable and assessed values different?<br />Proposal A of 1994 - Taxable value can only increase by the rate of inflation (CPI), or 5%, whichever is less. <br />2011 inflation multiplier (CPI) is 1.7%<br />Why is my tax bill still increasing during this downturn? <br />Proposal A of 1994 - Your taxable value will increase until it = SEV<br />If your current taxable value is less than your current SEV Proposal A is saving you money! <br />
  8. 8. What causes a dramatic increase in the taxable value of a home?<br />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<br />Change in ownership- adding someone or removing someone from a deed (excludes married couples)<br />Death of sole owner of a home or property<br />Improvements to the home<br />New construction<br />
  9. 9. What causes a dramatic increase in the taxable value of a home?<br />Example: Home inherited by children after their mother passed away <br />
  10. 10. Reducing Your Property Taxes<br />Review Your Assessment<br />Is the taxable value x 2 higher than the market value?<br />If the answer is YES – YOU HAVE REASON TO APPEAL YOUR PROPERTY TAXES<br />IF the answer is NO – THERE IS NO BENEFIT TO YOU FOR APPEALING YOUR PROPERTY TAXES UNLESS DETAILS ON THE TAX CARD ARE INCORRECT<br />
  11. 11. What do you do if you feel your assessment is incorrect?<br />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……) <br />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.<br />Assessors often assess the home from the exterior and may not know that there are errors<br />
  12. 12. What do you do if you feel your assessment is incorrect?<br />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?<br />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?<br />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.<br />
  13. 13. Supportive Documentation<br />State Licensed Real Estate Appraisers<br />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. <br />Recent ComparableSales (last 2 years)<br />Comparables refer to SOLD properties that are similar to your home.<br />Finished square footage of your home<br />Unfinished square footage (basements)<br />Number of baths<br />Age of the home (a depreciation factor adjustment is placed on the home)<br />Construction quality – home classification<br />Garage and outbuildings– size and finish quality<br />Size of decks, patios, porches<br />Type of siding and more<br />Other additional amenities of the home<br />Land value differences (waterfront, water view, lot sizes, location, topography)<br />
  14. 14. Board of Review<br />Designated dates, times and location of the local board of review are located on your notice of assessment for in person appeals<br />If you prefer, you can submit a written petition before the designated dates to your township appeals board<br />It is not necessary to make an appointment<br />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<br />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)<br />No decision will be determined on this day<br />You will receive written notice of the board of reviews decision with any changes in SEV and Taxable Value within 30 days<br />
  15. 15. After the Board of Review<br />Result<br />Your taxable value was reduced to an acceptable value<br />Your taxable value was reduced, but not to an acceptable value<br />Your taxable value remained unchanged<br />Next Step<br />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.<br />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<br />Within 30 days of submission you should receive written notice from the state assigning a docket number to your case<br />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<br />A decision will be made by the administrative law judge after their review of your supportive documentation<br />
  16. 16. Helpful Links<br />Blank Notice of Assessment, Taxable Valuation, and Property Classification<br /><br />Petition to Board of Review (must present this at local board of review)<br /><br />Principal Residence Exemption (PRE) Affidavit<br /><br />Request to Rescind Homeowner’s Principal Residence Exemption (PRE)<br /><br />Conditional Rescission of Principal Residence Exemption (PRE)<br /><br />State of Michigan Property Tax Appeal Petition Form (for state appeal)<br /><br />State of Michigan PRE Petition (if you are denied homestead after board of review) <br /><br />Leelanau County Millage Information Chart<br /><br />Grand Traverse County Millage Information Chart<br /><br />
  17. 17. Please contact us with any questions!<br /> Presented by: Vicky & Jonathan Oltersdorf<br /> Website: <br /> Phone: 231-271-7777<br /> E-mail:<br />Vicky Oltersdorf, Broker Jonathan Oltersdorf, Realtor<br />