Indepth information on how to lower your taxes, Metro Detroit millage rates, and how to understand Michigan property taxes
How Michigan Property taxes work - Local tax review boards - part 10Michigan's property tax system is confusing so here is a brief series on how Michigan property taxes work and about local tax review boards. So the first step in fighting to reduce your Michigan property taxes is to go to the local tax review board. The first thing you need to do is call your local city hall and set up your appointment for the tax review board. Also at the same time ask for their requirements on what you need to do. Three, six, or nine electors of the Township or City shall be appointed by the City orTownship to serve as the Tax Board of Review. If 6 or 9 are appointed, they are divided into Boards of 3 individuals for the purpose of hearing and deciding. Two of the three members of a Michigan tax Board of Review must be present for there to be any transaction of business. The appointees to the tax board may be local businessmen, lawyers, real estate professionals to name some of the people that serve on local boards of review. The local board of review is an informal affair. Usually you have 5 - 10 minutes to present your case. It is best to provide written documentation including sold comparables to the board. Remember these people are not elected and trying to do a fair job, so don't be rude, argumentative, or obnoxious as it won't help your case. Usually it is very very informal. (with folding chairs and a table.) The local board of review usually convenes in March to hear tax payers presentations on why their property tax assessment should be lowered. So call in February to set up when you can meet with them. Every person who makes a request, protest, or application to the March Board of Review must be notified in writing of the local Michigan Board of Review's action and information regarding the right of further appeal, not later than the first Monday in June. The bottom line is that the local board of review looks at the written information that you bring in. Dressing up and looking professional, being nice won't necessarily bolster your case. But being rude, and loud may hurt your case Russ Ravary your Metro Detroit real estate agent
Search Metro Detroit home listings and Metro Detroit homes for sale _________________________________________________________________________________________________________________________________________ How Michigan property taxes work- homestead taxes and non-homestead taxes - part 1 How Michigan property taxes work - the difference between SEV and taxable value part 2 How Michigan property taxes work - will my property taxes go up after I buy a house - part 3 How Michigan property taxes work - buy a foreclosure with non-homestead taxes - part 4 How Michigan property taxes work - SEV state equalized value - part 6 how Michigan property taxes work - Taxable value - part 7 how Michigan property taxes work series - homestead exemption - part 8 how Michigan property taxes work - reducing your Michigan property taxes part 9
http://www.detroitmichiganrealestatehomes.com/00515C Posted on Jan 21, 2010 @ 5:07 pm by russ.ravary - View Profile
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how Michigan property taxes work - reducing your Michigan property taxes part 9So now that you know how Michigan property taxes work, now how do you go about reducing your Michigan property taxes? So you think you are overpaying on your Michigan taxes? But what number are you looking at on your tax statement? Are you looking at the taxable value number? Remember that is the number the city bases your tax payment on. It doesn't matter whether the State Equalized value (SEV) goes up or down. Your only concern is the Taxable Value number! So multiple the taxable value by 2. How does that number compare to what you think the houses value is. Let's say the taxable value is $143,000. Times that by 2 and you get $286,000. But you think your house is only worth $220,000. Then it is worth fighting to get your Michigan property tax assessment reduced. Let's go over this again In 2007 the SEV was 180,000 and the taxable value was $139,000 In 2008 the SEV was 170,000 and the taxable value was $143,000 Remember it doesn't matter what the State Equalized Value (SEV) is. It doesn't matter if it goes up or down. Remember look at the taxable value number. That's what your tax bill is based on. But to further confuse you....when you fight to reduce your Michigan property taxes you are really lowering the state equalized value (SEV) to get to the point where it will lower the taxable value at the same time. So when you go to the tax review board and they lower the SEV, OK lets do two different scenarios based on the 2008 numbers of the SEV was 170,000 and the taxable value was $143,000. So if you fight the taxes and the board lowers the SEV to $150,000. It doesn't lower your tax bill but it does get it closer to the taxable value which is good. So it still would be good to do even though it doesn't save you money. The goal is to get the local tax review board to lower the SEV below the taxable value number so it lowers your tax bill. So again going back to our scenario where the taxable value is $143,000 you want to get the board to get the SEV down to (let's say) $137,000. Then the taxable value will become $137,000 too. I know this explanation is confusing, but our Michigan property tax system is confusing. I hope this explains how to reduce your Michigan property tax assessment. Russ Ravary your Metro Detroit real estate agent
Search Metro Detroit home listings and Metro Detroit homes for sale _________________________________________________________________________________________________________________________________________ How Michigan property taxes work- homestead taxes and non-homestead taxes - part 1 How Michigan property taxes work - the difference between SEV and taxable value part 2 How Michigan property taxes work - will my property taxes go up after I buy a house - part 3 How Michigan property taxes work - buy a foreclosure with non-homestead taxes - part 4 How Michigan property taxes work - SEV state equalized value - part 6 how Michigan property taxes work - Taxable value - part 7 how Michigan property taxes work series - homestead exemption - part 8 http://www.detroitmichiganrealestatehomes.com/00515A Posted on Jan 13, 2010 @ 3:48 pm by russ.ravary - View Profile
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how Michigan property taxes work series - homestead exemption - part 8The State of Michigan and Metro Detroit has a complex property tax system. But to explain it..... Basically your Metro Detroit home is either homesteaded or non homesteaded. Homestead basically means that you live in the Metro Detroit home as your principal residence. Our Michigan government has seen fit to give you a break on your Michigan property taxes if you live in the house as your principal residence. It is a reduced rate on your Michigan property taxes if it is a "homesteaded property". You get a homestead exemption from the state. You'll then pay less on your Metro Detroit property taxes. Non-homestead means that it is a commercial property, a rental property. It means that you are going to pay full price on your Michigan property taxes on your Metro Detroit real estate. But what happens if the property is duplex, or quad, or a property with two homes on it, or if you rent part of the property out? How much of it can you claim as your homestead exemption? How much will it reduce your taxes? Here are the Michigan Homestead exemption Rules for how much you can claim of a property. What about properties that have two homes one it? What about duplexs? What if I rent out the house to some friends? Here are the rules right from the Principal Residence Exemption (PRE) Affidavit If you own and live in a multi-unit or multi-purpose property (i.e., a duplex, a quadplex, or apartment building, or a storefront with an upstairs flat), you can claim an exemption only for the portion that you use as your principal residence. Calculate your portion by dividing the floor area of your principal residence by the floor area of the entire building. If the parcel of property you are claiming has more than one home on it , you must determine the percentage that you own and occupy as your principal residence. A second residence on the same property (e.g., a mobile home or second house) is not part of your principal residence, even if it is not rented to another person. Your local assessor can tell you the assessed value of each residence to help you determine the percentage that is your principal residence. If the parcel of property you are claiming has more than one home on it , you must determine the percentage that you own and occupy and the renters enter through a common door or your living area to get to their rooms, you may claim a 100 percent exemption if less than 50 percent of your home is rented to others who use it as a residence. However, if part of the home was converted to an apartment with a separate entrance, you must calculate the percentage that is your principal residence by dividing the floor area of your principal residence by the floor area of the entire building. If you rent part of your home to another person , you may have to prorate your exemption. If your home is a single-family dwelling and the renters enter through a common door or your living area to get to their rooms, you may claim a 100 percent exemption if less than 50 percent of your home is rented to others who use it as a residence. However, if part of the home was converted to an apartment with a separate entrance, you must calculate the percentage that is your principal residence by dividing the floor area of your principal residence by the floor area of the entire building.
How Michigan property taxes work- homestead taxes and non-homestead taxes - part 1 How Michigan property taxes work - the difference between SEV and taxable value part 2 How Michigan property taxes work - will my property taxes go up after I buy a house - part 3 How Michigan property taxes work - buy a foreclosure with non-homestead taxes - part 4 How Michigan property taxes work - SEV state equalized value - part 6 how Michigan property taxes work - Taxable value - part 7
I hope you are starting to learn more about our Michigan Property tax system and how to read your tax bill Russ Ravary your metro Detroit real estate agent http://www.detroitmichiganrealestatehomes.com/0050F1 Posted on Jan 01, 2010 @ 8:03 pm by russ.ravary - View Profile
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Investing in Detroit real estate may be trickyInvesting in Detroit real estate is tricky. I get a quite a few calls and emails from people who have bought Detroit investment properties on how to resolve problems with their investments. One of the major issues these investors have is how to reduce Detroit property taxes after they have bought the property. They don't realize when they buy a $4000 Detroit home they could have a $4000 a year in property taxes. Here is one of my latest emails from an investor: I saw your site and thought it would be worth contacting you. I live in FLA and am a full time real estate investor. Last year I bought 2 Detroit foreclosures. It has taken me almost a full year, after calls and letters, before the City/County would tell me what my Detroit property taxes were/are. I guess they could not read the typing on the HUD settlement statement because they have been sending them to the wrong location; and the addresses, according to their website don't exist. Anyways the taxes seem VERY high. I myself think investing in Detroit real estate for an out of state investor is a bad investment. But many out of state investors don't believe me so I thought I would share one of the many stories I get from them. This guy above hasn't been stuck with a water bill yet, been fined by the City yet, or had to evict anybody yet for lack of rent. He has yet to learn fully about investing in the City of Detroit and he is already frustrated. So I replied back: Unfortunately you have encountered a one of the many problems out of state investors have with investing in Detroit real estate. Unfortunately I don't provide that service of going before the board. It just isn't worth the money for the time I would have to spend to do it. The City of Detroit is very tough to deal with when fighting Detroit property tax assessments. They have a multi appearance tax review board to fight Detroit taxes. They even send out the dates and times to the review board very close to the review board dates. By doing that it reduces the amount of people able to fight them. You may not even get the notice of where or when to show up. Taxes are very high compared to the cost of the property. Even if you provide them good documentation they don't have to reduce the property taxes. Then you have to take it to the next level of the Michigan State tax tribunal. Which is a year to a year and a half to be heard and costs more money. As much as you don't care about the City of Detroit's economic issues they directly affect you. They need every tax dollar they can get to run the city. With the population diminishing because of people moving out of the city and less homes to rent because of fires and vandalism. Click on any of the categories for more information on: Metro Detroit real estate investment tips Southeastern Michigan home buyer tips Search Metro Detroit real estate homes for sale listings Russ Ravary your metro Detroit real estate agent _________________________________________ My quote of the day is: "Finish each day and be done with it. You have done what you could; some blunders and absurdities have crept in; forget them as soon as you can. Tomorrow is a new day; you shall begin it serenely and with too high a spirit to be encumbered with your old nonsense." Ralph Waldo Emerson http://www.detroitmichiganrealestatehomes.com/005152 Posted on Dec 31, 2009 @ 7:34 pm by russ.ravary - View Profile
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How Michigan property taxes work - how to read and understand your Metro Detroit property tax statement part 5You got your Michigan tax assessment and you have no clue how to read and understand your Metro Detroit property tax statement. How do you know whether your tax bill has gone up or down. There are two numbers on your Michigan property tax statement they are: TAXABLE VALUE and SEV (STATE EQUALIZED VALUE) SEV (STATE EQUALIZED VALUE) -is 1/2 the market value the city assessor assigns your property. So if the the city assessor thinks your house is worth $200,000 then your SEV would be $100,000. SEV is not the amount the city bases your taxes. SEV is not what you can sell your Metro Detroit house for. It is just what the city assessor thinks your house is worth. So just by multiplying the SEV by 2 will not give you what you can sell your house for or what it will appraise for. TAXABLE VALUE - Is the number your taxes are based on this is the number you need to look at. Taxable value is multiplied by your cities millage rate and that determines the amount you pay. That is what your Metro property tax statement has "taxable value", SEV, and what you owe. If you compared your Michigan property tax statements from a few years. If you notice the tax table below you will see that in the years 2005 and 2006 when home values were rising the city assessors "assessed" the home's value higher. In 2005 the assessor thought the home was worth twice $160,980 and then he thought it was worth twice $164,200. Then in 2007 the assessor realized home prices stabilized and then in 2008 and 2009 values started dropping. But see the homeowners had owned the house for years. And in Michigan the homestead act only allows the taxable value to go up "the lesser of 5% or the rate of inflation". So if you look at the taxable value you will notice that they kept going up even though the SEV went down. So this Metro Detroit homeowners taxes went up even though the SEV went down.
The bottom line is that you need to look at your taxable value to determine whether your Michigan taxes are going up or down. I hope this help you understand your Metro Detroit property tax statement. If you don't understand this feel free to call me or email me with any questions. I also do CMAs to help you fight your Michigan taxes.
How Michigan property taxes work- homestead taxes and non-homestead taxes - part 1 How Michigan property taxes work - the difference between SEV and taxable value part 2 How Michigan property taxes work - will my property taxes go up after I buy a house - part 3 how Michigan property taxes work - buy a foreclosure with non-homestead taxes - part 4 http://www.detroitmichiganrealestatehomes.com/0050F9 Posted on Dec 10, 2009 @ 10:03 pm by russ.ravary - View Profile
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