With property values plummeting, many people are wondering whether their property tax bill is fair. If you think your tax bill might be too high, now is the time to find out.

Notice

Each year, your local assessor determines the value of your home. The taxable value is based on the property’s market value as of the prior December 31st. That mean that your property’s taxable value for the 2011 tax year is based on what the assessor thinks your property was worth on December 31, 2010.

If you believe your assessor has too high of an opinion of your property’s market value, you have one opportunity each year to protest that value. That one opportunity is in March of each year.

In mid-February in most areas, you will receive a notice from your local assessor that is titled “Notice of Assessment, Taxable Valuation and Property Classification.” The biggest type on the notice, which is in bold, capital letters, will say “THIS IS NOT A TAX BILL”. While that is technically true, that warning can be very misleading.

This notice will show the taxable value for the prior year and the current year. More importantly, in very small print, near the bottom of the notice, will be the list of when your Board of Review will meet to hear challenges. Usually, the Board meets in March for only one or two days, from 3 to 6 hours per day. That is your only chance to object to the assessor’s value of your home. If you don’t attend the hearing to object to your home’s value at that time, you cannot object later, when you receive your actual tax bill.

Hearing

If you decide to object to your assessment, you should call the assessor’s office to see if there are any additional requirements you need to meet or if you can make an appointment for a specific date and time. At the time of the hearing, the burden is on you, the taxpayer, to establish the true cash value of your property. You need to be ready to present evidence and/or witness testimony about the property’s true cash value.

True cash value is based on one of three methods: capitalization-of-income approach, the cost-less-depreciation approach and the market approach. In each case, it is best to have a recent appraisal, performed by a licensed appraiser, for the purpose of establishing true cash value. Mortgage appraisals and market comparables gathered by your local real estate agent are NOT the same as a true cash value appraisal. You will have to determine whether your potential tax savings will be enough to offset the cost of a professional appraisal of the property.

Appeal

If you are denied a reduction by the Board of Review, you are entitled to appeal to the Michigan Tax Tribunal. An appeal must be filed by July 31st of the same tax year. Naturally, the appeal involves other rules about serving copies of the paperwork, presenting evidence, etc., so if you feel you need additional help, please contact us for a free consultation.