Money Stuff
With Michigan property values plummeting like a piece of Russian rocket debris, many people are taking a closer look at their property tax assessment statements.

This year when I opened up my property tax assessment, I found that the local assessor claimed my property went up in value $50,000 in one year - the same year that most houses in my county were going down in value.

I decided to appeal the assessment- and won. I've done this more than once for the same property! Here are my tips on how you can get lower property taxes too.


7 Rules to Appealing Your Property Tax Assessment


Rule #1: Time is not your friend. Act quickly, know the deadlines.
If you miss the deadline to appeal your assessment, you are out of luck. There is no appeal, there is no going back. You must pay what they say you owe. The only option you have is to wait until next year, and try again at the next assessment.

If you miss your local board of review deadline, even an appeal to the state board of review can't change things. The state will say that they "lack jurisdiction in this matter". There are several court cases to back this up.


Rule #2: Follow the rules exactly. Know the system.
Your new assessment statement will have (probably in fine print) the exact dates and times that you can appeal. Call to make an appointment- do not just show up betting there's an open slot! Ask questions before & durring your appointment. Be early to your appointment. They may have an updated information sheet on your property you can review to help improve your argument. (See Rule #6)


Rule #3: Understand Where Your Assessed Value Came From
Property tax assessment numbers aren't just created on a whim. Local Council members aren't (usually) Realtors, nor are they professional appraisers. They have far more important work to do than look at what your house is worth.

So where do the numbers come from? There's a very expensive computer program they use. They plug in the dimensions of your house, number of bedrooms, siding type, furnace type, etc... and voila! Out comes a number! From a political point of view, it's perfect- the computer is impartial, consistent, and designed by someone with more expertise than them. My local township uses BS&A software. (It also happens to be the first hit when you google "township property tax assessment software".)

Here's the problem. The actual value of your property is what someone will actually pay you. The computer doesn't know about that one house next door that's driving down (or up!) values on just your street. The computer doesn't know about "curb appeal", or other intangibles that affect how quickly a home sells. Even realtors can't guess a real sales price accurately. You have to go out and try to sell to get a real number. Anything else is just a guess. (Now, some guesses are better than others...)


Rule #4: Know what you can & can't ask for.
You will have to pay property tax- there's no way around it. The tax is based on a fair market value, not what you paid for the house, and not what you think its worth. What you need to do is build a good argument that says the actual fair market value is less then they claim it is.

In Michigan at least, you can only appeal the "SEV" - State Equalized Value. You can't appeal the "Taxable Value" - the number that taxes are based on. Thanks to Michigan's "Prop A", even a lowered property value can still mean a higher taxable value! Fight the good fight anyway- you're arguing for taxes you will have to pay in future years. (See my next blog article for more on Prop A)


Rule #5: Be respectful to authority.
If you're a Christian, there's a ton of verses to back this up. (Matthew 22:21 says pay your taxes, Romans 13:1-3 says obey the laws, Titus 3:1 says be subject to your government, etc.)

If that argument doesn't work for you, let me put it this way. These people have the power to ruin your day. Be nice to them. The same rule goes for all dealings with the IRS, Customs Agents, and any police officer.


Rule #6: Give them a good reason to change their mind.
The assessed value they gave you is from their big, expensive, property assessment software. They're going to trust that software over your word, unless you can give them a good reason. Just asking for a lower assessment isn't going to cut it.

The Assessors office will have a scary looking printout of all kinds of measurements for your house. Ask for that, and look it over closely. There will almost certainly be mistakes here - there's far too much information about any house for the records to be perfect. Look for mistakes, and note them. Pay special attention to square-foot measurements of the land and all buildings.

Write down your corrections, and give them to the assessor. Ideally you want to do this at your meeting to appeal your assessment. The goal here is to show that there's an honest mistake, and solving the mistake happens to show that your house is worth less.

What you really need is an independent & accurate appraisal. For example (in order, starting with the best possible):
-An accepted purchase offer (even if it fell through for some reason)
-An offer to buy your house (even if not accepted!)
-An appraisal by a licensed appraiser
-Comparable sales (not listings- actual completed sales) of a similar house
-A listing price from a Realtor (beware - this number is often inflated wishful thinking!)

If you have any of the above, you've got an excellent argument. Get a copy of any documentation to back up your statement, and have it at your review appointment.


Rule #7: There's always a way to appeal up.
If you don't like your original assessment, you can appeal with the local board of review. This information is on your original property tax assessment.

If you don't like the answer from the local board of review, you can appeal to the state board of review. For Michigan, this is the "Michigan Tax Tribunal". In 2008 you've got until July 31st to file an appeal with them. Again, information on how to do this will be on your property tax assessment.

If you don't like the state level appeal results, you can get your state representative to change the tax laws. (Don't laugh - this is how "Prop A" got into Michigans constitution!)

If you don't like how your state rep is passing laws, you can run for office yourself!


That's it! I've twice gone before my local council to get my property tax lowered, and succeeded every time. I've never had to go to the state level. Last time I asked for, and received, a lowering of my appraised value by over $54,000. (For the record, that's decrease of about $4,000 from last year's assessment- instead of the $50,000 increase they wanted!)

All in all, both times it was a pleasant process, as far as dealing with taxes can be. Everyone at the local township office was very patient and helpful, despite having a near record number of appeals this year.

Related Links
-Michigan's Property Tax- Lower values still mean higher taxes - For more details on Prop A