Michigan property tax


The National Taxpayers Union estimates that as much as 60%
of taxable property in the United States is over assessed. However, only 5% of homeowners protest their assessments. Most people are unsure of the process to lower their taxes or have never known anyone that has. This site hopes to give help through information contained here or through our network of "Property Tax Experts" to help you pay your fair share of property tax.

Mistakes can often be a reason why a taxing authority values your home for more than the current market would allow. Obvious mistakes aren't difficult to spot. Is the square footage figure correct? Does the assessment say your home has four bedrooms when it only has three? Property description and information with your assessor should be reviewed for errors.


More importantly with this downturn in the housing market mainly in the United States, home values are declining and for many who purchased their home when the values were at their peak, you may find a greater impact.

Each year we file a personal tax return to assess how much income tax we owe. Why is this not the case with property taxes? Did you know many of us pay more annually in property tax than income tax, yet ignore assessing our property tax bills. Just like with income taxes, there are deductions and credits we can take advantage of, and the tax rate is based off the value of your home. If you made $100,000 in income last year and $80,000 this year you would expect to pay less tax. If your home was worth $100,000 last year and now its worth $80,000, would you pay less in property tax or continue to pay too much tax?

Michigan Tax Tribunal

The Tribunal is an administrative court that hears tax appeals for all Michigan taxes. Most of the Tribunal's appeals involve property tax; however, the Tribunal also hears business and individual tax disputes. The Tribunal is divided into two divisions: the "Entire Tribunal" and the "Residential Property and Small Claims" Division. With the exception of principal residence and qualified agricultural exemption appeals, any case may be filed in the Entire Tribunal. Only certain cases-all property disputes involving residential property, principal residence exemptions, poverty and qualified agriculture exemptions and disputes under $6,000 may be filed in the Small Claims Division.

 

Michigan Transfer Tax – are You an Exempt Seller?

Here's an excerpt:

"An exemption from the requirement imposed by the State Real Estate Transfer Tax Act, MCL 207.521 et seq, to pay state real estate transfer taxes upon the transfer or sale of real property may be claimed under MCL 207.526(t) if, on the date a parcel occupied as a principal residence is transferred, its state equalized value is less than or equal to its state equalized value on the date the owner purchased or acquired the parcel and the property is sold for not more than its true cash value at the time of sale."

You can read the opinion letter for yourself by clicking here.

To summarize, a seller may be exempt from paying the state transfer tax if:

  1. The property sold is their primary residence.
  2. The sales price is less than twice the current SEV.
  3. The SEV on the sale date is less than or equal to the SEV when the seller bought the property.

Here are three examples from the opinion:

EXAMPLE 1:

  • SEV when acquired in 2006 = $74,000.00.
  • SEV when transferred in 2008 = $72,000.00.
  • TCV in 2008 = $144,000.00.
  • Transfer or sale price in 2008 = $140,000.00.

OUTCOME: This transfer qualifies for exemption from the state real estate transfer tax because the SEV for 2008, the year of sale, is less than the SEV for 2006, the year of acquisition, and the sale price does not exceed the true cash value.

EXAMPLE 2:

  • SEV when acquired in 2006 = $74,000.00.
  • SEV when transferred in 2008 = $72,000.00.
  • TCV in 2008 = $144,000.00.
  • Transfer or sale price in 2008 = $148,000.00.

OUTCOME: This transfer is not exempt under MCL 207.526(t) because the sale price exceeds the true cash value for 2008, the year of sale.

EXAMPLE 3:

  • SEV when acquired in 2006 = $74,000.
  • SEV when sold in 2008 = $75,000.

OUTCOME: This transfer, regardless of the sale price, is not exempt under MCL 207.526(t) because the SEV for 2008, the year of sale, exceeds the SEV for 2006, the year of acquisition.

It's important to note that this exemption does not cover the county transfer tax.

Also, it's advised that a seller consult with an experienced real estate attorney.

It would be interesting if Realcomp (MLS service provider) could/would analyze 2009 sales for the tri-county area to determine the percentage of home sales that qualified for this exemption.  I'm sure a high percentage of short sales did.

I'm also sure those in Lansing running the budget numbers haven't taken this potential loss of revenue into account.

Courtesy Drew Sygit

 

 

Top 10 Metropolitan
Areas with Home
Price Depreciation

First Quarter 08-First Quarter 11

Metro Area
Loss
Miami
36.4%
Las Vegas
34.6%
Phoenix
33.0%
Los Angeles
31.7%
San Diego
30.5%
San Francisco
30.2%
Tampa
29.6%
Detroit
27.9%
Wash. D.C.
25.3%
Minneapolis
24.4%
 

loan michigan

 

Tax Rates

Property owners can calculate their tax bill by multiplying that taxable value by the tax rate.
In Michigan, the property tax rate is called a millage, and it is figured in mills. A mill equals $1 in taxation for every $1,000 in taxable value.

A parcel may have several millages in its tax rate. There is likely to be a millage to operate local government, and another for the county. Part of the millage rate may include mills for libraries, police and fire or schools.