Michigan property taxes and state equalized value

How to figure out your new Michigan property taxes

I recently got an email about Michigan property taxes.

 I came across your site searching for how to fight Michigan property taxes and Property tax assessment.    How do Michigan foreclosure sales affect Michigan property taxes?   If one was to buy a Metro Detroit foreclosure that sold for $200,000 3 yrs ago for $100,000 will the property taxes be lower?  Is there a good way to find out what the taxes will be?  The city will only tell you the previous tax, then reset it the next year which can turn out to be a nasty surprise.  Is there any way to find out before hand before purchasing a house?   Thanks

                                                                                       A Smart forward thinking home buyer

Let’s use a fictitious city as an example .  Unfortunately when you buy a Northvilleland home the taxes will be based on the SEV (state equalized value which is the value the Northvilleland’s city assessor places on the house.)  Unfortunately the city assessors value (state equalized value / SEV) is out of line with current market prices.  You have to remember that the cities (Northvilleland’s) income is based on the property value.  So they are not going to readily lower the property taxes in line with the fall in value of Northvilleland homes.

If you were a Northvilleland City official you probably wouldn’t either.  Could the City of Northvilleland afford a 30% drop in revenue.  Because that is how much Northvilleland home values have fallen in the last 3 years. ( My guesstimate)  The City would be facing a major shortfall to run the city.  So what the city does is give a small decrease to placate most people from coming to the tax review board.  Then the ones that do come they give another small decrease.  Which is smart business for the city.  It placates Northvilleland taxpayers who don’t want to take the time to go to the State Tax Tribunal yet maintains as much tax base as possible.

This is happening in many Southeastern Metro Detroit cities.

So to answer your questions: Metro Detroit foreclosureswill be used as comparables for tax assessment.  So eventually Novi foreclosures, Canton foreclosures, Plymouth foreclosures will lower the tax base.

But right now let’s say you buy a Livonia home.  I will use one of my listings as an example.

I have the Livonia home listed at $189,000 and it will sell for less.  Let’s say we got $180,000 for it.  The state equalized value on this Livonia home is 106,800.  So the assessor thinks this Livonia home is worth $213,600 even though we got it sold for $180,000.  Many new home buyers think they would be paying $2925.29 what the old taxes were.  But you the smart home buyer know better.  Thenew Michigan property taxes will be the state equalized value (SEV) times Livonia’s Millage rate.  So Livonia’s millage rate is .03380 times that by the state equalized value (SEV) of 106800 and you get 3609.84    106800 X .03380 = 3609.84  That is what your new property tax on this Livonia home would be.
And that is if you buy it as a homesteaded property (you live in it)  A rental property gets taxed at a higher rate.  I hope this Michigan property tax explanation helps you.  Your real estate agent should be able to help you with this information.

If you are not working with an real estate agent and would like an real estate agent to get you all the information you need to make a good decision on a Metro Detroit foreclosure call me on my cell at (248) 310-6239

My quote of the day is:

 Character is doing the right thing when nobody’s looking.

 J.C. Watts