Property Tax Assessment Appeals
Get Your Commercial or Residential Real Estate Taxes Lowered!
The property taxes you pay are primarily based on your property’s assessed value as determined by the County Assessor. If you disagree with the value established by the assessor, Fakhouri Law Group can help you appeal your property tax assessment.
Now is the best time for property tax appeals. With the recent downturn in the real estate market, the fair market value of property has decreased throughout Michigan. However, while the market value of residential and commercial property has decreased, the assessed value used by the state to determine your property taxes may not accurately reflect the decrease in your property’s value. In short, you may be paying too much for property taxes. Fakhouri Law Group has the necessary experience to fight for your property tax appeal. With the proper attorney at your side, you could realize thousands of dollars in tax savings.
How does the Appeals Process Work?
The Michigan property tax appeals process may vary by location. Generally, however, it starts with the annual assessment notices mailed out in February of each year. If you own residential property and do not believe that the assessment is based on a fair market value, you may only have a short time to file a protest of assessment with your local board of review. Local review boards usually hold their hearings in early or mid-march. However, some cities require an administrative appeal prior to any appeal to the local board of review. In any case, this step is critical because you cannot appeal to the Michigan Tax Tribunal (July 31st deadline) unless you have first appealed to your local review board.
Commercial Property Appeals
If you own property that has been classified as commercial, industrial, or developmental, no local board of review appeal is required and you may appeal directly to the Michigan Tax Tribunal before May 31st. Unfortunately, the wait to actually be heard in front of the Tax Tribunal is typically about 18 to 24 months. However, our attorneys will often be attempting to negotiate a resolution with the assessing official at the municipal level. We work with professional real estate appraisers and accounting professionals to develop a compelling case for a lower assessment, which leads to lower property taxes.
Property Tax Assessment Appeals FAQs
Q: If I have commercial, industrial or developmental real estate, do I have to appeal to the local Board of Review?
A: No. For these types of properties owners can choose to skip the local Board of Review appeal and appeal directly to the Michigan Tax Tribunal. The filing deadline for these types of appeals to the Michigan Tax Tribunal is May 31.
Q: What does my tax assessment mean (what is the difference between assessed value, taxable value, state equalized value, and fair market value)?
A: Your tax assessment should list several values for you to review:
- Assessed Value: This value is equal to 50% of the true cash value (which generally means fair market value) of the property according to the local assessor.
- Taxable Value: This value is the amount that will be subject to the millage rate to determine your property tax. This value can never be more than the assessed value and is typically lower than the assessed value. Your first assessment after purchase of the property will typically show that the taxable and assessed values are identical. After the first year of ownership, the assessed and taxable values can diverge because the taxable value can only go up by the rate of CPI or 5% whichever is less for each year of ownership, while the assessed value has no such limit.
- State Equalized Value: Except in rare cases where an equalization factor other than 50% has been applied by the county in which the property is located, the State Equalized Value will equal the Assessed Value.
Q: Should I appeal my taxes?
A: If the fair market value of your property has fallen significantly below twice the taxable value listed on your property tax assessment, you should consider an appeal. For example, if you own a warehouse that has a taxable value of $750,000 (which when doubled equals $1.5 million), but the fair market value of the building has fallen to $900,000, then an appeal is recommended.
Q: What are the costs of an appeal?
A: Typically, the cost of an appeal will include the following:
- Costs of an appraisal for the property. The cost of appraisal will depend greatly on the type of property being appraised.
- Appeals fees (fairly nominal in comparison to the scope of most appeals).
- Attorney’s fees. Attorney’s fees will vary greatly from firm to firm and depends on what stage in the appeals process the matter is either resolved or settled. If a settlement is reached with the local assessor early on in the process, the attorney’s fees will be on the low side where if the appeal proceeds through to an entire tribunal hearing, the fees will be significantly higher.
Q: What is the value of an appeal?
A: The immediate value of the appeal will be the tax savings for the year that the taxpayer is appealing. However, if the appeal results in a significant reduction in the property’s taxable value, the tax savings can be recognized over multiple years from a single appeal. We can prepare a cost/benefit analysis specifically for your property to aid you in deciding whether an appeal is recommended for your particular situation.
Contact us today for a free consultation where we can start the process of reducing your property taxes.