Challenging a Property Tax Assessment

onlygirlsmomFebruary 28, 2012

We just received our property tax notice. It has our property value going DOWN almost 20%. Now, I know people challenge their assessments going the other way -but I don't think our value has gone done that much in the last year. We live in Michigan and our economy has pretty much been flat lined (in the tank) since 2007, although it has improved a little this past year. The past couple of years our value has gone down maybe 2-4%.

My reason of concern is that we are planning on putting our house back on the market this Spring, so, ideally would like our assessment as high as possible.


1) Any "tricks" to increasing your odds of winning? (maybe I should bring the assessor's mom cookies...she lives across the street from us and we've watched her cats before..) :) Our next door neighbor's assessment barely changed, as did many on our street -so, it's not like they dropped values across the board.

2)Should we pay for our own assessment so that when we list we can show the potential buyer what it has been assessed at or is that just a waste of our time/money?

Should we contact our realtor and have her run comps?

TIA for your advice!

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Does your tax assessment have any bearing on your market value? I'm asking because in my area (California) there is no correlation to the market value. Buyers never see that until they own the house. I'd be thrilled if my assessment went down that much.

    Bookmark   February 28, 2012 at 7:26PM
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I don't know actually. I know, in most circumstances most people would love for their property taxes to go down.

    Bookmark   February 28, 2012 at 7:32PM
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In most cases, a property tax assessment has no correlation to market value. A Realtor can provide comps that will give you a better target value. If you're really worried about it, you can pay for your own appraisal, and that will give you an idea of how the banks will value it, which may be more important in this case.

    Bookmark   February 29, 2012 at 7:11AM
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Why would you want buyers to realize they have to pay more taxes on your home, as opposed to less taxes? The tax value has no bearing on what your property is worth. And most buyers DO take a look at the annual tax bill before making an offer.

    Bookmark   February 29, 2012 at 7:37AM
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"My reason of concern is that we are planning on putting our house back on the market this Spring, so, ideally would like our assessment as high as possible. "

Assessments for taxes have nothing to do with market value.

Stop complaining and smile at the lower tax bill (of course the tax rate may have been increased to hold the actual taxes the same).

Remember, you do not pay the rate OR the assessment, but the product of the two.

    Bookmark   February 29, 2012 at 10:29AM
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Your town/city/state would be more than happy to have you pay more taxes, if that is what you want! I agree with the other posters ... your logic is a bit flawed.

Depending on your town/city and how they calculate RE values (and how often), you could have assesments that are close to market value or very different. My old town in Mass kept assesments pretty current and in "normal" markets they used to lag about $100K from market value. In todays market with short sales and foreclosures the numbers can be all over the place.

CA is a crazy place with Prop 13. It sets the assesment value at the purchase price, with controlled increments. So you can have neighbors with similar houses worth $1 mill, but one might be paying $2k in taxes and the other $12K. A flawed system that they also applied to commercial real estate! One of the many reasons the state of CA has major money issues.

Your future buyers, if they use a bank, will be required to have an apparaisal. The assesment won't matter ... what will matter is the current RE market at the time of the sale.

    Bookmark   February 29, 2012 at 12:01PM
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Thanks for the input and pointing out my flawed logic :)

I spoke with the realtor who we're going to be listing with and she gave me some great advice. First, she said don't go fighting the assessment. Second -usually the tax assessment doesn't factor too much into list/sales price..except in our miserable market when she said buyers look at that and think that is what they should get the house for. She also said that we'll be able to use last year's assessment for now (the new one doesn't have to be listed until this summer) Third-she did think it would be good for us to get an appraisal so that we'll know ahead of time the ballpark we're in (instead of close to closing and then have everything blow up). And we are within spitting distance of what she/we where we want to list the house. She'll run comps once we're closer to list time (hopefully by the first of April).
Thanks for your input :)

    Bookmark   February 29, 2012 at 1:04PM
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I have to laugh! In 2006, when we listed our home in Brighton, MI we got a large tax assessment decrease that year.
Silly me went to the tax tribunal and asked them why did they lower my assessment, I thought it should have stayed the same, every other year it had gone up!!!!
At the time, they shook their heads and said they had never had someone upset the assessment had gone down.
It's just the nature of the beast in this economy. I don't think it made any difference in the sale of the house tho.
Good luck, Kathy G in MI

    Bookmark   March 2, 2012 at 11:24PM
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Thanks Kathy :)

    Bookmark   March 3, 2012 at 2:35PM
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