Should You Challenge Your Property Tax Assessment in Michigan?

Learn whether you’re eligible for big property tax savings in Michigan.

Updated by , J.D. · University of Washington School of Law

Homeowners in Michigan must pay property tax each year, to the local taxing authorities. In most Michigan counties, the tax is due in two installments on July 1 and December 1, though specific counties may have different due dates. For details, check with Michigan's Department of Treasury for your city, township, or village treasurer.

Opening your tax bill can be a cause for shock, if not outrage. But by learning how property taxes are computed in Michigan, you can investigate whether the assessed value of your home is too high, and thus is the basis of an excessive property tax bill.

This article describes the tax assessment process in Michigan and measures you can take to have that value reduced.

How Your Michigan Property Tax Bill Is Calculated

According to Michigan's General Property Tax Act, two factors determine your tax bill: the taxable value of your home (assessed annually), and the applicable tax rate (that is, the percentage of the taxable value that the local tax authorities use to compute your property tax). Below is an overview of these factors.

The process begins when a local public official, known as the local tax assessor, determines your home's taxable value. In Michigan, the taxable value of a home is up to 50% of its "true cash value" (basically, what the home would sell for on the open market). The 50% figure is also known as the assessment ratio.

The taxing authorities multiply the taxable value of your home by the tax rate to arrive at the tax you'll owe. For example, imagine that the taxable value of your home is $300,000 and the tax rate is $10 for every $1,000 of taxable value. Your property tax for the year will be $3,000 (300 x $10 = $3,000).

Local officials set the tax rate, so it varies depending on where you live. You cannot do much about the tax rate except to vote wisely for the elected officials who determine the tax rate, and carefully consider revenue issues that appear on the ballot.

But the story is different for the taxable-value factor. Here, you have more leverage. If the taxable value assigned to your home is too high, you might be able to get it reduced, and save a bundle in property tax. A $500 reduction in your annual tax bill would add up to $5,000 in savings over a ten-year period. Not bad!

You can get contact information for your local tax assessor by calling your city, township, or village office, or by visiting the website of Michigan's Department of Treasury.

Exemptions From Michigan Property Tax

The law does contain some exemptions that might help reduce your tax bill, such as for:

  • permanently and totally disabled veterans discharged from the U.S. armed forces under honorable conditions or their un-remarried surviving spouse, if the disability resulted from military service and they are found to be unemployable by the Department of Veterans' Affairs
  • nonprofit housing for elderly or disabled families
  • portions of the property that contain certain trees, erosion control features such as a seawall, or solar, wind, or water energy conversion devices, and more.

Most of the other exemptions have to do with non-residential uses of a property.

How to Look Up the Property Tax Assessment for Your Home

The tax assessment of your home is not a secret; it is a public document that you can review, by getting a copy from the tax assessor's office (most likely online). Look for any inaccurate or incomplete information that leads the local tax assessor to place too high a value on the property.

Among other things, check the following:

  • Is your home correctly classified as residential property?
  • Is the size of your home and the lot it sits on correctly stated?
  • Does the record accurately list the number of bedrooms and bathrooms?
  • Does the record list any improvements that were not actually made?
  • Are defects in your home, such as a leaky basement or an aging roof, mentioned?
  • Is the age of your home accurately stated?
  • Is the purchase price accurate?
  • Does the record give you the benefit of all the tax breaks that you might qualify for?

Michigan also offers an easy-to-use property tax estimator on its website.

If there's wrong or incomplete information, let the tax assessor know, so that the record can be corrected and the taxable value adjusted. But even if the tax record is accurate, you might disagree with the tax assessor's conclusion regarding the market value of your home. In that case, you will need to do more.

Gather Information About Your Home's Valuation

Two types of information can help you establish that the tax assessor has placed too high a taxable value on your home. The first (and most important) is how the assessor has treated homes similar to yours. The second is how much homes like yours are currently selling for.

Find the Taxable Values of Similar Homes

Review the assessment records for homes in your community that resemble your own. (These are available through the tax assessor's office.) Finding comparable homes will take time and effort, but can be worth it if you believe that your home is truly over-valued.

Try to find homes that have approximately the same square footage as yours and are located in the same neighborhood or a nearby one. If your home has amenities such as a pool, try to compare other homes with similar such amenities. If similar homes have a taxable value lower than yours, this is strong evidence that your home is over-assessed.

Consider this example: Todd and Liz own a three-bedroom ranch-style home in a subdivision that has many homes quite similar to theirs. The taxable value of their home is $375,000. They check the records for a dozen similar homes in their subdivision and discover that the average taxable value of those homes is $340,000. What's more, most of the other homes have finished basements, while and Todd and Liz's doesn't. Todd and Liz have good evidence for claiming that the taxable value of their home is too high.

Find the Sale Prices of Similar Homes

If you bought your house recently, the price you paid is excellent evidence of its current value. Regardless of when you bought your home, you should gather information about recent sales prices of similar homes in your community. Online resources such as Zillow can also be useful, but be aware that the values generated there are by a computer; no one has actually visited the house.

Try to avoid relying on transactions in which the buyer has purchased a home from a relative, or at a foreclosure or property tax sale. The sales prices in such transactions might be artificially low and won't be convincing evidence of true market value.

Also consider asking an experienced real estate broker to give you information about recent home sales in your area, drawing from the Multiple Listing Service database. You might need to pay a modest fee for such assistance. If the stakes are high, you can hire a private appraiser to gather the information and provide a written report, though this will be more expensive. The Appraisal Institute website lets you search for a professional appraiser by zip code.

Also, note that if you recently refinanced your home or took out a home equity loan, the lender probably ordered a professional appraisal. Obtain a copy of it. It might give you powerful ammunition in your quest for a reduced taxable value.

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