Understanding Your Residential Property Taxes
Kelly Sweeney, Coldwell Banker Weir Manuel CEO, presented an informative property tax seminar at the Birmingham Community House on February 16th, 2011. For those who could not attend or did not hear about it, I wanted to provide a summary of what was discussed to help inform homeowners about the tax appeal process.
Spring is the time of year to appeal. According to an article in the Detroit News on Feburary 11, 2011, residential property assessment fell for the fourth straight year in Metro Detroit. It also states that if your taxable value is the same as the assessed value, you will see a reduction in your property tax bills this year.
Have you ever asked yourself… “Self, how can my taxes increase when property values are going down?”
Nancy Browning has the answer
1. Taxes are paid based on Taxable Value (TV), not State Equalized Value (SEV).
2. SEV’s are based on a trailing sales study (prior year’s sales).
You should consider an appeal…
1. Any time there is an improper uncapping (trust transfers, QCD’s, etc.).
2. Any time there is an error of fact.
3. After any purchase.
4. Any time there are significant subtractions and/or additions.
5. Any time the taxable value exceeds realistic true cash value.
If you decide to do an appeal, here’s what you will need…
Notice of Assessment
Sent to property owner in January or February
Valuation Record, Field Sheet-Sketch, Economic Neighborhood Boundaries
Available from local municipality
These may also be available online
Comparable Sales Worksheet – An assessor or myself, a CBWM agent, can provide you with this info. When preparing the comparable sales worksheet, use at least 3 comparables, up to six is helpful. Homes of similar style and size will provide a more credible comparison.
The information about how and when to appeal your assessment is on the tax assessment itself.
How assessed values are calculated…
Assessors calculate the depreciated replacement cost of your home and other improvements then add to that the value of your lot. That result is then adjusted to local market conditions by applying an economic condition factor (E.C.F.) which is based on sales that occurred in your neighborhood from October 1, 2009 to September 30, 2010.
This is done in a “mass appraisal” environment and is not always that accurate on an individual basis. You may elect to do your own sales comparison and make your case at the Board of Review.
When approaching the board, make sure you make a clear, concise presentation. Leave out emotion. Be well documented. The board of review always meets in March but you must make an appointment. Once you plead your case, you will be notified in writing before July 1st. The decision is only binding for one year. The stronger the case, the more willing they are to make a permanent adjustment on the file.
If you think your taxes are high, you should go to budget hearings. They are open to the public. Many show up to the Board of Review to complain but don’t realize they can make a difference at budget hearings.
If you need additional information, need comparables for your area or have any questions, please call me 248-701-7119
