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Is Your Real Property Tax Too High? Now is the Time to Consider a Protest or Appeal

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Laura J. Genovich and Steven L. Owen
Foster Swift Finance, Real Estate and Bankruptcy News
March 6, 2015

As a result of an improving Michigan economy, real property values have been on the rise, and property taxes are following suit. Tax assessors have been busy at work assessing property values during January and February. If you own personal or commercial real property you either have, or will soon be receiving an assessment notice that identifies the assessed value at which your property will be taxed.

Taxpayers who disagree with their assessment can appeal but must act fast because the appeal process is short and has strict deadlines.

How 2015 Taxes Are Calculated

Michigan voters passed “Proposal A” in March of 1994. It created a cap on the annual increases in “taxable value” of real property. Unless there was a transfer in ownership or additions were made to the property during 2014, the taxable value of a parcel of real property will be increased for 2015 by the inflation rate multiplier of 1.016. Further, the General Property Tax Act and Michigan Constitution require the assessed value to be 50 percent of market value.

The Appeal Process for Residential Real Property and Agricultural Real and Personal Property

Local boards of review in communities across the state typically meet in early March. Owners of residential real property and agricultural real or personal property must file a protest with their local board in March. If the issue is not resolved at the local level, then it can be appealed to the Michigan Tax Tribunal (the “Tribunal”). The final date for filing appeals to the Tribunal is July 31, 2015.

In some communities, additional steps are required to protest an assessment, so make sure to review your local requirements or have your attorney do so. For example, in Detroit, a protest to an assessor’s board is necessary before the assessment can be protested to the board of review.

The Appeal Process for Commercial, Industrial or Developmental Real Property

Owners of commercial, industrial or developmental real property are not required to protest an assessment to the local board of review, although they may.  Instead, they can simply file an appeal directly with the Tribunal. The final date for filing appeals to the Tribunal is May 31, 2015.

Special Considerations for Environmental Contamination and Conservation Easements

Taxpayers who have known environmental contamination on their properties and  those who have entered into conservation easements should consider challenging assessments. Recent statutory changes and decisions from the Tribunal have been favorable to taxpayers seeking reductions in their assessments for those reasons.

Deadlines for Principal Residence Exemption Affidavit

There are now two deadlines for filing a Principal Residence Exemption (“PRE”) Affidavit – June 1 and November 1. A PRE affidavit submitted on or before June 1 will reduce that year’s summer and winter taxes, as well as future years’ taxes, as long as the property is owned and occupied as the owner’s principal residence. A PRE affidavit submitted after June 1 but on or before November 1 will reduce that year’s winter taxes and future years’ taxes (as long as the property is owned and occupied as the owner’s principal residence). 

We are Here to Help

If you need assistance reviewing your tax assessment or determining whether a protest or appeal is appropriate, please contact a Foster Swift attorney. Our attorneys have extensive experience representing taxpayers in property tax protests and appeals, including significant commercial and industrial appeals.