Benjamin Franklin said there were only two things certain in life: death and taxes.
On the subject of taxes, while some of you are tempted not to read any further, those that are still with me could discover the path to a lower property tax bill. Below is a step-by-step guide explaining how!
How much are my property taxes?
For the answer, go to one of two sources: If the county where the property is located has online services (Kent County does), go to the online database and review the actual tax bills. If not, get a ballpark estimate using this Property Tax Estimator. Estimating property taxes for a homestead, the approximate amount paid is the first estimated amount shown. The estimated non-homestead property tax amount is the second estimated amount.
How do I know if I am paying too much?
The key to answering this question begins with the Notice of Assessment. Typically, Notices of Assessment are sent in January each year. Take a look at a sample here. First, locate the taxable value on the Notice on line 1 in the second column. Now, follow the easy steps below.
Step 1. Multiply the current taxable value by two. If the sum is equal to or lower than the property's fair market value, you are probably paying what you should.
Step 2. If the value from Step 1 is only a little higher than fair market value, it may not be worth further investigation. Otherwise, proceed to Step 3.
Step 3. To investigate further, get a cost estimate for a property appraisal. If the estimate is more than you want to spend, gather sales data of comparable properties. If the data confirms the disparity, you can proceed to Step 4. If an appraisal confirms the disparity, you now have a solid basis for a property tax appeal.
Step 4. Timing is critical in the appeal process and differs based on communities and the property's classification. Some communities require an initial appeal to their assessor within several weeks after receiving the Notice of Assessment. Assessments of properties classified as residential and agricultural must also be appealed to the local March Board of Review.
Step 5. The final step is an assessment appeal to the Michigan Tax Tribunal within certain time periods, dependent on the property's classification. The Tribunal's small claims division can be used for disputes with lower dollar amounts. Larger disputes must be filed with the "full" Tribunal. Whether small claims or full Tribunal, a property tax attorney can be hired to assist you.
Written by Andrea Crumback, Partner, Mika Meyers PLC.