TAXES HIGHER THAN VALUE OF YOUR PROPERTY!

ONLY IN MICHIGAN
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GOOD MORNING FLINT!
BY Terry Bankert 3/01/08
http://attorneybankert.com/
You are invited to join me at Face Book
http://www.facebook.com/people/Terry_Bankert/645845362
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Full article at:
http://goodmorningflint.blogspot.com
Summarized article on Flint Talk:
http://flinttalk.com/viewtopic.php?p=25815#25815
Inez Brown comment
http://www.youtube.com/watch?v=hsnzt3Ufy-4
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ITS JUST NOT FAIR, no tax payer will believe it is fair to tax them at a rate higher than the value of their property. To the elected officals and political leadership just what are you going to do to correct this injustice. Following are several articles I found to educate my self, I hope some of this is of value to you.[trb]

If you're upset about your latest property tax bill and think your taxes are just too high, there is a place where you can argue and try to have them reduced. [12]

You can give it a shot in front of the Local Board of review, good luck. You see there are possibly too things working against you 1. A city that has artifically kept property taxes high in a declining housing and commercial market. 2.Proposal A haunting you from John Englar's political grave.[trb]

When the conservative began to run amok in Michigan their dumb decisons are costing michigan families today.[trb]

(S)ome aspects of what has become known as Proposal A were not well thought out.[M]

OUR LEGISLATURE Passed as a tax limitation amendment to the state constitution in 1994, Proposal A which limits property tax increases to the rate of inflation or 5 percent, whichever is less, regardless of increases in home values.[M]

HERE IS WHAT THE BALOT PROPOSAL SAID ADOPTED 3/15/1994 ( A low turn out special election whodathunk)

A proposal to increase the state sales and use tax rates from 4% to 6%, limit annual increases in property tax assessments, exempt school operating millages from uniform taxation requirement and require 3/4 vote of Legislature to exceed statutorily established school operating millage rates. The proposed constitutional amendment would:
1. Limit annual assessment increase for each property parcel to 5% or inflation rate, whichever is less. When property is sold or transferred, adjust assessment to current value.
2. Increase the sales/use tax. Dedicate additional revenue to schools.
3. Exempt school operating millages from uniform taxation requirement.
4. Require 3/4 vote of Legislature to exceed school operating millage rates.
5. Activate laws raising additional school revenues through taxation including partial restoration of property tax.
6. Nullify alternative laws raising school revenues through taxation, including an increase income tax, personal exemption increase, and partial restoration of property taxes.[MI]

The legislation established both a taxable value and an assessment value on a home. The assessed value is half of true cash value, but the taxable value is what is used to determine a homeowner’s taxes.[M]

THIS WILL BE A HARD FIGHT JUST TO BE FAIRLY TAXED

But to be successful, you'll need to be prepared. [12]

So you think you are paying too much in property tax. How do you know that you are? First of all, do you understand the difference between your state equalized value (SEV) and your Taxable Value?Remember you are not appealing the taxes, you are appealing the assessment, the SEV. By appealing the SEV you reset the SEV and the taxable value. It should be in your best interest for years to come.[REN]

ASSESSORS ARE JUST REGULAR PEOPLE, THEY MAKE MISTAKES

If you opened up your property tax bill recently and thought the assessor was just downright wrong, you can argue your case at your tax board of review.[12]
Most communities have their review boards meeting next week. If you're thinking you want to go, you'll [12]

PAT WAS WRONGED

Pat Oakes is not only a homeowner, but also a realtor. And given his background, he knew right away when he opened up his tax bill that his taxes were being pushed up higher because his house was being valued over what it should be.[12]
It is comparison information that will help people like Oakes when they show up at their tax board of review next week.[12]

After you buy your home then taxable value will become more important. There are two numbers on your tax bill. SEV and the second is taxable value. Proposal A of 1994 changed the way taxes were determined. Instead of increasing taxes based on 50% of actual cash value, commonly referred as SEV (state equalized value) now after the first year you buy a home property taxes are based on taxable value. If a property is not acquired during that tax year then the increases in taxable value are limited to the lesser of five percent or inflation.[REN]

So boiling that down in English the first year you buy a home the taxes are based on SEV. The second year the taxable value is SEV plus the lesser of five percent or inflation. Remember inflation on the house can be negative so sometimes taxable value and SEV can go down.[REN]

The first year you are taxed on the SEV value and then from then on you are taxed on the taxable value. [REN]

ILLOGICAL SMOGICAL
They warn homeowners against basic arguments, saying that it's illogical for their taxes to go up while their values go down.[12]

AGAIN HERE ARE THE TERMS BEING USED AGAINST YOU
Difference between SEV and Taxable Value

Your SEV is determined or set when there is a change in ownership of the property. I.E. when you buy the property the SEV is "reset" by the assessor to the current SEV. The state equalized value (SEV) is 1/2 the cash value of the property. (Or market value). The assessor usually determines what the SEV is by using comparables that have sold over a 2 year period. Just because you bought the house at $200,000 doesn't mean that the SEV will automatically be $100,000. The SEV value of the house may be above or below the purchase price. In the buyers market of 2007 & 2008 I am seeing many SEV's higher. That home with a $200,000 purchase price may have a SEV of $260,000.[REN]

PROPSAL A

For houses that have been owned before Proposal A when into effect back in 1994, that's just the effect of a souring economy.[12]

The system is the result of Proposal A, the measure that capped how quickly
property taxes could rise even as home values skyrocketed.
This year, Proposal A is working in a different way allowing
taxes to continue climbing while people are struggling to find home
buyers and property values are dropping. As long as the market value of
your home (an amount double the states assessed value) remains
greater than the taxable value, your assessment can decline from
year to year while your property taxes rise [FJ]

Taxable value is the dollar figure that your property tax bill is based on. Because of Proposal A, taxable values can continue to rise even when a property's market value is dropping. [FJ]

Taxable and assessed values become the same after a property is sold. After the sale, taxable values can continue to rise, but not more than 5 percent per year or the rate of inflation, whichever is lower. [FJ]

Helpful Web link, "How to read your assessment notice." http://www.michigan.gov/documents/0310_ASSESS_tax_document_124137_7.pdf.

Source: Michigan Tax Tribunal[FJ]

Over time, for people who have remained in their homes, the gap between the taxable value and assessed value has widened. Because of that, those people will likely see an inflationary increase in property taxes even if their assessed values have gone down.[M]

A home’s assessed value would have to fall below the taxable value for property taxes to decline.[M]

One of the problems with Proposal A is that when it was passed, legislators did not address the situation of a declining Michigan housing market.[M]

So now, while some residents face lower assessments on their homes, the decrease is applied to only the true cash value of the house, not the taxable value, which could be considerably less than the true cash value, but is the figure used to determine a person’s tax liability.[M]

YOUR BURDEN TO SHOW LOWER VALUE

What can help you reduce your assessment and possibly lower your taxes is coming in with documented proof that your house's value is lower because of comparable home prices or because of problems in the home that the assessor may not have known about.[12]
And don't forget to bring proof in writing.[12]

A RECAP

Assessors say it's a quirk of Michigan's landmark 1994 Proposal A property tax reform, which amended the state constitution and changed the way public schools are funded.[L]

The voter-approved law limited how fast property taxes can rise. But, assessors say, it also limits how fast taxes can drop when property values tumble.[L]
The Greater Lansing Association of Realtors data shows the average sales price of houses dropped to $141,569 last year. That was down 8 percent from $154,167 in 2006.[L]

"Now that the market is going down, people think their (taxes) should go down. But honestly, there's no tie," [L]


BOARD OF REVIEW

To find out when your tax board of review is meeting, you'll want to contact your local city or township offices.[12] And blame this problem on every elected official in sight.



Posted here by
Terry Bankert GOOD LUCK
http://attorneybankert.com/
Join my political party of preference
http://www.michigandems.com/join.html
—where did this stuff come from---
[12]
WJRT 12 TV
http://abclocal.go.com/wjrt/story?section=news/local&id=5996222#bodyText
[FJ]
The Flint Journal 3/2/08
http://www.mlive.com/news/flintjournal/index.ssf?/base/news-49/120443904655640.xml&coll=5
[M]
The Mortgage Foundation
http://www.mtgfoundation.com/2006/12/michigan-property-tax-proposal-doesnt-account-for-declining-housing-market.html
[REN]
The Real Estate Network
http://activerain.com/blogsview/337379/Fighting-your-Michigan-taxes
[L]
The Lansing State Journal
http://www.lsj.com/apps/pbcs.dll/article?AID=/20080224/NEWS03/802240640
[MI]
The University of Michigan
http://www.lib.umich.edu/govdocs/propa.html

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