APPEALING YOUR TAX ASSESSMENT TO A MICHIGAN
PROPERTY TAX BOARD OF REVIEW
Plan ahead by speaking with your local assessor about your concerns
- Determine if you are concerned the assessment of your property's value is too high, or
- if you simply feel your taxes are too high (you can't afford your taxes)
- The procedure to cure number "1" above is different from the procedure to cure number "2" above
- Appeals are made on a property's State Equalized Value and not it's Taxable Value.
If your value is too high, verify facts then pursue a correction
- Compare your records and beliefs with the assessor's and understand differences. For example,
discrepancies in the square footage, or in the number of rooms or any other item affecting value should be explained.
- Speak with the assessor about facts which you believe are either erroneous, missing or should be considered.
- Most assessors will automatically correct errors of fact when they are discovered and you will not
have to appear before the board of review.
- If you decide you must appear before the local board of review, be prepared to document facts and any value you believe should be placed on your home.
- Documentation includes:
- examining sales the assessor may offer as evidence of the value of your property.
- Finding recent sales of properties comparable to yours
- Make a comparison of average selling prices per square foot for properties that have been
used by either you or the assessor as comparables
- Examine comparables for glaring differences between them and your property: this could be age, lot size, condition, number of bedrooms, pools, garages etc.
Consider hiring a professional real estate appraiser (Fee Appraiser)
- This is a person who charges a fee for appraising your property and has no financial or other interest in it which might effect the estimate of value.
- Choose a person licensed by the state and preferably one with a professional designation for a professional organization.
- Verify that the appraiser agrees his/her work may be used in a Board of Review Hearing
- Verify that the appraiser would be willing to appear on your behalf if necessary before the Board of Review or the Michigan Tax Tribunal.
- You may not need an appearance by an appraiser before the local Board of Review, but you should be prepared to use one in any appeal before the Michigan Tax Tribunal.
What to do if your taxes are too high!
- You cannot appeal an assessment simply because you cannot afford to pay the tax levy. Property taxes are based upon a property's value - not the owner's income. An inability to afford paying taxes is cured through tax breaks and exemptions. With one exception, the poverty exemption, high taxes are never appealable to a Board of Review- only the value of property estimated by the assessor is appealable!
- When your taxes are too high for you to afford, you should first look to Michigan's "Circuit Breaker" law for help. This is the form 1040CR filed with your state income taxes. Any Michigan taxpayer who pays more than 3.5 percent of their household income in property taxes is eligible for benefits under the circuit breaker law. Household income means income from all sources.
- Renters may also qualify for a cash reimbursement under the circuit breaker law. 20 percent of one's rent is considered equal to a property tax as long as the building being rented is taxed under property tax laws. So, if 20 percent of your rent is more than 3.5 percent of your household income, then you
can get cash back from the state of Michigan using form 1040cr. This is especially useful information for college students if they live apartments and not dorms.
- There is a "poverty exemption" in the state of Michigan. It is granted for only one year at a time. Under this law, the Board of Review may order your State Equalized Value to be reduced or even set a zero valuation (a complete exemption). Such a reduction forces the property's Taxable Value to be reduced and thereby causes a reduction in your annual tax burden.
- Ensure that the proper millage rates have been applied. Under Michigan law there is a "Homestead" millage rate which applies to qualified residential and agricultural properties. Qualified means you reside in the structure as your home to the extent required by law. The homestead rate is much lower than a "non-homestead" rate and often represents a tax reduction of more than 33 percent.
- Senior Citizens, the disabled and others may qualify for a greater reduction under circuit breaker laws than the ordinary working stiff, but each category receives benefits.
Rules for appealing
- You may appeal in person or through an agent
- If you choose to use an agent, provide that person with a written document authorizing their right to appeal on your behalf
- You may appeal in writing (you do not have to appear personally or through an agent) if you do not reside in the jurisdiction in which the property being appealed is located.
- Township Boards of Review must:
- convene the Tuesday following the first Monday in March of each year
- During that first day and the day following, if necessary, shall meet
- The board must make its decision according to the facts which existed on "tax day". Tax day in Michigan is the December 31st which precedes the Board
- The board of a township must meet on the second Monday in March at 9am and continue in session for not less than six hours.
- The board shall also meet for not less than six hours in the remainder of the week following the second Monday in March
- You should always verify meeting dates, the method by which you may register for an appearance before a Board of Review and whether or not appointments for appearances can be made.
- If your appeal involves complicated issues, it is wise to submit materials a week or more in advance of your appeal date so that the assessor will have a chance to review the information. For truly complicated reviews, it may be unreasonable to ask an assessor or the Board of Review to attempt to make a decision without giving them an appropriate time to analyze facts and digest relevant information.
- You may want to check with the assessor to see if extra copies of any evidence or support materials for your appeal will be needed. This is not required by law before the Board of Review, but some Boards and Assessor's find it helpful.
- If you are appealing an assessment of property located in a city, make sure you check with the Assessor for dates of the Board of Review. City Boards of Review are not bound to the specific meeting dates promulgated by state law for townships. Municipal meeting dates are set by the charter of the city.
- Property tax valuations are based upon historic sales information. This is usually a two year study which runs from March to March. Historic sales data will not properly reflect current market trends. During periods of inflation in real estate values, these studies lag and your State Equalized Values and Taxable Values will be low. During downturns in local real estate markets Equalized and Taxable Values may be higher than actual market prices. Of course, if a taxable value has been held down for years, the taxable value used by the assessor may remain below current market value even when there has been a fairly large drop in current real estate market values. Make sure you know each of these three values before deciding upon any appeal. An assessor can petition to use a one year study when appropriate.
- WARNING - Be aware that special assessments are not property taxes and may not be appealed to the local Board of Review for ad valorem taxes. Unlike property tax appeals, procedures for appealing special assessments are very limited and can be much more expensive. Generally, you may only appeal a special
assessment activity when special assessment districts are established, when the boundaries are modified and when a special assessment levy is actually confirmed by the local governing body. Government units levying special assessments and the process itself, enjoy a "presumption of validity". This means unless you take action during one of the limited appeal periods, you are stuck with whatever was decided. Also, unlike property taxes where there are constitutional limits to the amount of time a tax can be levied; judicial interpretation of current Michigan law permits some special assessments to be levied forever. It is not uncommon to see government officials ask that a police or fire millage may be approved without any termination date for assessments. This is also true of other forms of specials which don't require a vote of
the people such as lake level special assessments. While it may not seem fair to some taxpayers that appeals are so restricted and that they can be taxed forever, this situation will not change unless proper legal challenges prevail. Unfortunately, where ad valorem tax disputes may cost only a few hundred dollars to appeal, there is no cheap way to appeal special assessment levies. To overcome the presumption of validity, requires legal assistance, valuation assistance and the assistance of other professionals and experts ... all paid for by the taxpayer appealing.
FINALLY - While this information has been provided free of charge, if it helps you to avoid aggravation or receive a tax reimbursement or enables you to reduce your tax burden, please consider sending compensation in an amount
you think fair to Michigan Property Consultants. Even a single dollar helps. This is a small company which pays every month to maintain this display, to pay for research and to generate documentation found herein. Thank you.
MICHIGAN PROPERTY CONSULTANTS L.L.C. 2719 State St., Saginaw, MI 48602
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