It’s That Time Again: Real Property Tax

It is that time again.  You should be seeing notices of assessment from your local assessor for your real property in the mail very soon, if you have not already received them.  There are several items on your tax assessment notice of which you should be aware of in order to ensure they are correct and you are being taxed properly.

What is the taxable value of the property?

Has the tentative value of the property gone up significantly since last year?  If so, the assessment notice probably indicates that there was a transfer of ownership of the property in 2014.  If you believe this is incorrect, you should contact your assessor and have this changed.  If your assessor is unwilling to change it, you have a few options.

If the property is classified as residential or agricultural property, you should go to the March Board of Review, which takes place during  the second week of March. If you do not receive the result you were looking for at the March Board of Review, you can appeal to the Tax Tribunal no later than July 31, 2015.

If the property is classified as commercial, industrial or developmental property, you can skip the Board of Review, but you will nevertheless need to appeal to the Michigan Tax Tribunal prior to May 31, 2015.

How can I tell how the property is classified?

You can tell how your property is classified by looking at the classification code in the notice of assessment.  If the code starts with a 1, it’s agricultural; 2, it’s commercial; 3, industrial; 4, residential; and 5, developmental.

Does the assessment notice accurately reflect exemptions to which the property is entitled?  

If your property should be tax exempt because you are a nonprofit corporation using it for nonprofit purposes as described in the General Property Tax Act, then the tentative taxable value should be $0.00.  If your property should have a principal residence exemption (PRE), it should have 100% next to the box on your assessment notice.  If you are not receiving the exemption that you believe  you should, again contact your assessor right away to have this changed and if your assessor does not change it, you can appeal the tax exempt status of the property to the Board of Review or the Tax Tribunal.  You can appeal the PRE status of the parcel to the July or December Board of Review at the local level and then the Tax Tribunal if the July or December Boards of Review do not provide relief.

Is the assessed value one-half of what you believe to be the true cash value?  

If not, and a reduction would result in a reduction of your taxable value or you want to reduce the potential uncapped amount if you plan on transferring the property this year, you should call your assessor right away.  If you cannot work it out with the assessor, you will need to appeal to the March Board of Review (if residential or agricultural property) or the Tribunal by May 31, 2015 (if commercial, industrial or developmental property).

Is your property classified correctly?  

Is your property classified as “residential” when it should be “agricultural,” for example?  This error could result in you paying significantly more in taxes, because if the property is classified agricultural, you are automatically entitled to an exemption from the 18 mills school operating taxes on the property (other than structures being used for non-agricultural purposes).

If your property is not classified correctly, you need to appeal the classification of the property first to the March Board of Review regardless of how the property is classified and then to the state Tax Commission by June 30, 2015, if the Board of Review does not change the classification.

Deadlines and appeal dates are right around the corner.

The deadlines and appeal dates are very important to know and follow if you want to contest your property tax bill or assessment.  In many cases, if you miss a deadline, you will be prevented from raising the issue until next year.  The first of these deadlines and dates is the local assessing jurisdiction’s March Board of Review.  Check your Notice of Assessment to determine if you have any issues with its contents and whether you need to go to the March Board of Review to present those issues.  If you must go to the Board of Review, check your notice carefully to determine when the Board of Review meets, and how to file an appeal with the Board or Review.

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