It’s That Time of Year in Michigan: Time to Check your Property Tax Assessment

In the past few weeks, all property owners should have received their 2024 Property Tax Assessment notice. Since this is not a tax bill, many people don’t pay attention to it and do not realize their taxes have increased until they receive their summer tax bill in July. However, if there are any errors on your notice, you only have until the second Monday or Tuesday of March (this year March 12th) to make an appointment with the Board of Review (BOR) to have these fixed. I always recommend calling your local assessor first to discuss the changes because often they can be fixed without needing to come before the BOR, but if the assessor does not agree, the BOR is another avenue available to the taxpayer.

If you purchased a property in 2023, it would become uncapped in 2024 and your Assessed Value and Taxable Value will be the same. These values should approximate ½ of the market value of the property, which is often close to the price that was paid for the property unless the property was purchased at a discount or premium to market rates. In subsequent years, the taxable value of the property will increase by the rate of inflation (capped at a 5% maximum), but the assessed value will go up (or down) in line with the market for similar properties. It is important to make sure the property is not over-assessed on the year of the transfer, since your taxes will be based on the taxable value for the remainder of the time you own the property.

Changes to the property can also change the taxable value each year. For example, an addition to a building would increase the square footage and cause “additions” to be added to the taxable value, whereas removing an old pole barn from a property would decrease the value and lead to “losses” in taxable value. If your taxable value changed by anything other than a 5% increase (which was the CPI inflation amount for 2024), it is going to be due to additions or losses. It is important to check these additions or losses as they will affect the taxes you owe when the actual tax bills are sent out. The change in the assessed value is reflective of the market value and will not affect your taxes.

Most often the assessor does a great job of getting the values correct and there is no need to request any clarification or changes, however, mistakes happen, and it is much easier to fix these before the board of review meets and the tax rolls are set for the year.

Dan Stiebel
CCIM, Coldwell Banker Schmidt Commercial REALTORS® | Guest Contributor