Rising Property Taxes - How to Appeal
Each January every property owner receives a Notice of Assessment, Taxable Valuation and Property Classification from the local authority. It has a big notice on it that says This Is Not A Tax Bill. What it is, however, is a notice of what your assessed value will be for the coming year. And this year, we’re getting hit by warnings that inflation will send taxable home values soaring by 5% on 2023 tax bills – the biggest increase in 28 years. It could have been worse, but Michigan law puts a 5% cap in place. When you receive this notice and read it carefully, there are instructions for making an appointment to appeal your taxes and the days that the taxing authority will be holding Board of Review sessions. While few people have overwhelming success appealing at this level, it is a must-do step before appealing to the Michigan Tax Tribunal, where substantially larger reassessments could be given. The Tax Tribunal decisions can even be retroactive, possible affording the homeowner a substantial amount of relief.
When you go before the appeal board you will be asked the following questions: What do you feel your house is worth? What criteria did you use to come to this number? And finally, the BIGGIE; Would you be willing to sell your house for this amount? They always ask this!
When compiling your list of comparable sales, try to keep it as close to your home as possible and as realistically close as possible in terms of square footage, level of upgrades, year built, lot size and amenities. It just won’t fly if you are trying to get a reduction on a 5,000 square foot house that was built in 2016 based on a comparable of a 1942 slab ranch that is 1,800 square feet. All comparables must be in the same area (same city, even same subdivision, if possible), same school district and, preferably, within a one-mile radius. Most important, the review board will not accept any sales that are homes sold under distress (foreclosures, estates, sheriff’s sales, redemption sales etc.) as a comparable sale.
The day of your appeal DO: 1. Bring enough copies of all pertinent material for each member of the appeal board (in my locality it is between 3-5 members, but you should ask when making the appointment). 2. Think about what number you are looking for. Your State Equalized Value will be higher than your taxable value because of Proposition A in Michigan. Identify your home’s worth ahead of time. 3. Bring copies of comparable sales within the time period being considered for this year’s taxes. Again, this time frame should be confirmed when you are making your appointments. Different tax authorities may use slightly different time frames for admissible comparables. Remember that the sales they are basing the upcoming tax rates at are usually up to two years prior. Don’t try to use something that sold a week ago! 4. Be warm, friendly, informative and brief. They hear lots of appeals during a short period of time and the ones that will stand out the most are the ones that provide pertinent and informative data.
Finally, please do not hesitate to contact us if you need help obtaining comparable sales for your appeal. We are here to help and may have access to data that can make your appeal a success!
