Monday, March 9, 2009

Property tax assessments

Many homeowners have been receiving their annual tax assessments -- and most reflect drops in value, although not necessarily a drop in taxes.
Most of those who see values drop, but not taxes have been protected from former increases by Prop A. Now that same protection keeps them from realizing drops in taxes, at least until the slowed increase in taxable value catches up with the protected amount.
Most of those who have been protected and then blocked from reductions have owned their homes for over five years. However, even those who have purchased recently may be blocked from reduced taxes. Under Michigan law, property assessors base their assessment of what it sells for, or what comparable homes are selling for.
You may think that the assessor is placing too high a value on your home -- particularly if you are trying to sell it at that rate and are getting no offers. But that is part of the delay that kicks in whenever there is a dramatic shift in property values.
There are two things that drive this delay. One, the assessor cannot base his assessments of sales under stress -- that would be all the foreclosures out there today. The second is the general slowdown in the real estate market which creates a shortage of actual sales that can be used as comparables.
The lag in the drop of assessments in relation to true values also happens when home prices are rising, so it all works out.
Still, if you have objections, you should schedule an appointment with your local review board. And, if you still are not satisfied, you can take your claim to the state. In both of these appeals, be ready to present your own research into comparable sales.


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