Bigger Michigan property tax rebates, but assessors move to increase tax

February 25, 2014

Bigger Michigan property tax rebates, but assessors move to increase tax

Article provided by Hoffert & Associates, P.C.
Visit us at http://www.hoffertlaw.com

During the first week of February, Governor Rick Snyder called for $103 million in property tax refund checks, primarily for low- and middle-income renters and homeowners. The Michigan governor's proposal to expand the Homestead Property Tax Credit would be retroactive to the 2013 tax year.

As the Michigan legislature convenes to put together a budget for fiscal year 2015, many state lawmakers are coming out in favor of an even more generous Homestead Property Tax Credit than that proposed by the governor. But, even as the state moves to return a property tax surplus, many local assessment departments are working hard to maximize the tax collected through reassessment practices guided by few firm guidelines and little oversight.

Assessors may choose which property to value on year-to-year basis

Under Governor Snyder's plan, the income cap for receiving a Homestead Property Tax Credit would be raised from the current $50,000 to $60,000. This rebate would reach more than 1 million taxpayers. An even broader expansion to the Homestead Property Tax Credit has been proposed in the Michigan legislature by Senator Dave Hildenbrand; under this measure, the income cap would be raised to $70,000, resulting in $150 million to $175 million being returned to taxpayers. These proposals come in the wake of a recent revenue estimating conference that credited Michigan with a $971 million surplus.

Yet, even as the state is making plans to return funds to taxpayers, many Michigan localities are moving to increase residential property tax revenues by engaging in creative reassessment policies.

Property taxes are obviously based on the value of the property in question, but value of real estate is a somewhat fluid concept. Almost exactly two years ago, the State Tax Commission formally encouraged local governments to inspect at least 20 percent of parcels annually. But, the guideline adopted in February of 2012 failed to specify what an inspection should entail, or to require that the 20 percent of property inspected annually not overlap with property inspected the previous year.

In many Michigan localities, there is no set schedule of when, or which, properties will be reassessed. When the time for reassessment does come, most townships will post a public notice and then send out workers-- often part-time college students with little experience -- to knock on doors. If no one is home, unless there is a "no trespassing" sign in the yard, the workers will measure the house along with any external structures that the assessors believe may not be listed on the property's assessment card.

Get help from an attorney if you wish to lower your property tax

Even in municipalities that have a policy not to enter a yard to make measurements when no one is home, there is a lack of meaningful guidance for reassessment and few opportunities for homeowners to provide input.

It can be confusing and challenging for taxpayers to meet their property tax obligations while navigating the shifting landscape of reassessment, exemptions and credits. Even lawmakers themselves have trouble: On February 17, the Detroit Free Press reported that State Representative Rashida Tlaib wrongfully took a homestead exemption on a piece of rental property since 2008 (Tlaib called it an "honest mistake").

An experienced property tax attorney can help you dispute a tax value assessment. If you need help with a property tax issue, or wish to explore legal avenues to lower your property tax, get in touch with a Michigan attorney today.