Property Tax to High?

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With the drop in property values in the past few years you may qualify to save some money on your property taxes.  A home’s taxable value is supposed to be approximately 50% of the fair market value in the State of Michigan.  Depending on when you purchased, the yearly savings could be significant.  The hard part is assessing what the fair market value is for your property.  First question everyone has is, do foreclosures count as comparable that can be used in evaluating my house?  Here are the guidelines directly out of a memo from the State to assessor’s for use this year in determining taxable value

All Sales must be analyzed and verified to ensure they are arms-length transaction. The appropriate verification process contains but is not limited to:

1. A determination as to whether the type of sale being reviewed is a measurable portion of the market.

2. A determination that the sale property was properly exposed to the market. For example, by listing with a real estate company.

3. A physical inspection of the property to make a determination that the assessment reflects the condition of the property at the time of sale unless the condition can be verified by other means.

4. Receipt of a properly completed real property statement to determine the terms and conditions of the sale unless adequate alternative statistical procedures are utilized to ensure the sales are an adequate part of the market.

5. A determination that the parties to the transaction were not related and each was acting in their own best interest.

I would take this to mean yes, beacause all of the criteria in a reo transaction is met here.  The only caviout  I would give is based on the condition of the property.  If you are going to use foreclosed properties, be ready to give points and adjustments on the difference in condition of the subject home (yours) and the foreclosed property being used as the comparible.   I will be posting more information on property tax assessments as we get closer to the property tax reviews in the second week in March.  I will also be providing a service this year of handling property tax reviews for a fee.  If you are interested in seeing if you have a case, email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 517.349.9330 x206.  I would be happy to schedule a complimentary sit down.