Saturday, February 7, 2009

Be ready for your property taxes

It’s that time of year for you to be ready for your Property taxes.

You should receive, from your local assessor, a notice of assessment change sometime later this month (February) or the 1st week of March. Here are a couple of examples:

· Lodi and Pittsfield Townships will mail out their 2009 assessment notices during the last week of February.
· The City of Ann Arbor will mail out their 2009 assessment notices during the 1st week of March.

The notices of assessment will give you the proposed 2009 State Equalized Value (SEV) and Taxable Value (TV). Your property taxes are based on TV, while the SEV is “supposed” to give you an idea of the market value of your property. We all know that the market value of our property has declined in the past year, so you should look for your SEV to decline this year. Each municipality may have a different rate of SEV decline for last year.

Your TV this year could change for 3-reasons:

  1. The rate of inflation (Consumer Price Index, or C.P.I.) was 4.4% for 2009 for everywhere in Michigan – meaning that your TV may rise by 4.4% this year (Gasp!);
  2. Any improvements that you made to your property in 2008 – meaning that if you improved your property last year, you should expect that your taxable value would go up by the amount of your improvement;
  3. If you bought your home in 2008, your TV would un-cap and go to the same level as the SEV.

In your notice of assessment will be the schedule for the Board of Review (BOR) for your municipality. For example, in Lodi Township (where I live), the BOR is scheduled for 9am-3pm on Monday, March 9, and from 3-9pm on Tuesday, March 10. Your municipality will have a similar schedule. Typically, your appointment time with the BOR will be ten minutes. During that time, you will have an opportunity to present your case for the BOR to change (lower) your SEV or TV, or both.

There is one and only one question that typically matters with the BOR - does the SEV or TV exceed 50% of the market value of the property?

Things that are irrelevant to the BOR include:
· Your property taxes are going up while values are dropping;
· Your property taxes are higher than those of your neighbors;
· Your “feeling” that your property taxes are excessive.

Even if you are right on each of these three items, it doesn’t matter. What does matter to the BOR is that you show that your new TV is greater than 50% of the market value of your home as of December 31, 2008.

The window of time between receiving your 2009 notice of assessment and making an appointment to appeal with the BOR is narrow. You need to be ready for the notice, and call quickly to schedule an appointment of protest with your BOR. If you miss the BOR schedule, once the BOR adjourns, then your SEV & TV are set for the year.

In short, be ready for your Property taxes!

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