Property Taxes--Notices of Assessment
Property taxes in northern Michigan are a big deal. My colleagues often represent northern Michigan property owners in tax appeals. Here is some timely information from my colleague Tim White on notices of assessment that property owners are receiving.
Property owners in Michigan will soon be receiving a letter from their local assessors, that says “THIS IS NOT A TAX BILL” at the top. Because it isn’t a tax bill, some do not think the form is important. However, this is the Notice of Assessment for 2018, and it determines how big your property tax bill will be for the year. So it is very important. Here is a simple guide on how to read it, and how to determine whether should protest or appeal the assessment.
How to Read the Notice of Assessment:
- The Notice of Assessment is issued by the local assessor on Michigan Department of Treasury - Form 1019;
- The top section of the Notice contains information on the Assessor, the taxpayer, the tax parcel, any applicable exemptions, and the parcel’s classification;
- The middle section provides information on the Taxable, Assessed and State Equalized Values, whether or not there was a Transfer of Ownership in the prior year, and the inflation multiplier.
- The bottom section provides information on how and when to protest the notice to the Board of Review.
Some Important terms:
- Taxable Value. This is the number that actually determines the amount of the taxes you will pay. The millage rates in effect are multiplied by the Taxable Value to determine the amount of the Summer and Winter taxes.
- Assessed Value. This number cannot exceed fifty percent of the parcel’s True Cash Value (Synonymous with Fair Market Value). It is an indicator of how much the Assessor believes the parcel is currently worth.
- State Equalized Value. This number is determined based on a mass appraisal approach for all properties accross the state.
Here is who may want to protest the assessment to the March Board of Review (in most cases, if you do not protest your assessment to the Board of Review you will lose your appeal rights). You should consider protesting the assessment if:
- The Taxable Value has increased significantly from the prior year (more than the inflation multiplier listed on the form);
- You believe that the value of the home is less than twice the Taxable Value;
- You purchased the property in the prior year and any of the values (Taxable, Assessed or SEV) is more than half of what you paid for the property (or the appraised value);
- The Property is not classified properly;
Note: Issues related to the Principal Residence Exemption are not protested to the March Board of Review. To obtain the PRE for a home for the tax year, an affidavit must be filed prior to June 1. PRE denials can be protested to the July or December Board of Review. In addition, in some cases you may be able to retroactively obtain the PRE exemption by seeking a review by the July or December Boards of Review.
Of course, if you have any questions on your Notice of Assessment, or whether you should protest your assessment, please contact us.