It’s that time of year again.  Property tax assessments should be arriving in the mail anytime if you have not received them already.  The March property tax board of review is coming!!  This is the only time of year we as property tax paying citizens have the right to protest what the assessor has valued our properties at and is charging taxes based on that value.  Detroit residents, pay close attention to the dates on your notices, they do theirs in February.

To give you a little background in 1994 proposal “A” was enacted which is a tax initiative that capped all property values.  This limited annual assessment increases for each property parcel to 5% or inflation rate, whichever is less. When property transfers ownership the cap comes off and the property is reassessed. 

On your tax assessments there are two values listed; one is taxable value, that is what you are being taxed on (and the one that is capped) and the other is the State Equalized Value (SEV) which there is no cap on.  The SEV is irrelevant to the current property owner.  It only becomes relevant when the property is sold.  The Taxable value then becomes the SEV.  When a property is sold, both of these values become the same amount.  The problem arises when the SEV is $50,000, which would indicate a fair market value of $100,000.  If the property is purchased for $75,000, the taxable/SEV values should be $37,500; but they are not, they are what the SEV value is $50,000.  The local assessor has discretion on determining taxable value.

The process to appeal this starts at the local assessor for which municipality the property is located in.  Call and find out what days/times the tax appeals are done and see if you need to make an appointment.  The burden of proof is upon the property owner to prove the value assessed is too high.  Shortly after you will receive a letter with their decision.  If you are not happy with the decision you have the right to appeal with the Michigan State Tax Tribunal.  This must be post marked by July 30th of the same year. 
 
In my early years I paid little attention to tax value and every year when I received my tax statement I would just file it away.  Most of the time it did not make much of a difference due to the fact that property values were increasing so fast.  That is not the case anymore so make sure you inspect them carefully.

Chris Yatooma, President
Real Estate Investors Association of Oakland