how Michigan property taxes work – buy a foreclosure with non-homestead taxes – part 4

Figuring out how Michigan property taxes work is hard enough and then tobuy a foreclosure with non-homestead taxes.  Non homesteaded taxes are high because the previous owner did not live in the house.  They are usually much higher than homesteaded taxes.  The goal of every home buyer is to get rid of those non homesteaded taxes.  If you buy a Metro Detroit foreclosure with non homestead taxes how long will you have to pay the high taxes? ManyMetro Detroit home buyers think that the high non homestead taxes will go away as soon as they buy the house.

But that is wrong.  Cities only change non homesteaded taxes back tohomestead tax on May 1 of each year.   That is when they change.  May 1.  So if you buy a Metro Detroit foreclosure on October 15, you will have to pay the higher non homestead tax rate until next May 1.

Then why won’t they change it the day you buy the house?  The simple reason is the cities don’t want to give up any tax dollars.  So unfortunately you are stuck with a higher tax bill until next year.  But the good news is next year your house payment will go down if you have your taxes included in your payment.

Whether you buy a West Bloomfield home or a Redford home I hope this explains what happens when you buy a foreclosure with non-homestead taxes.

Russ Ravary


How Michigan property taxes work- homestead taxes and non-homestead taxes – part 1

How Michigan property taxes work – the difference between SEV and taxable value part 2 

How Michigan property taxes work – will my property taxes go up after I buy a house – part 3



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