What Kind of Jobs Do You Guys Have That Allow You to Pay Such High Property Taxes?!

[Arabian Antonio]

I have reluctantly given up on La Salle Gardens as a decent neighborhood to live in. I've come across a lovely house on Parkside Street near the golf course, a street which looks like a treasure trove of architectural delights. It's a 4,200 square-foot house and appears to be in really good shape. How is this neighborhood when it comes to safety? I contacted the listing agent to find out about the property taxes, and he said they were $6,800 a year! My question to you guys who own property in Detroit is...

What kind of jobs do you have that allow you to pay such high property taxes?!

It seems that you'd have to be making at least $80,000 a year to be able to afford taxes like these. And after paying these taxes, I learned that in neighborhoods like Palmer Woods, the city doesn't even remove snow from the streets. That expense is paid by the neighborhood association, which charges residents an additional $495 a year. On top of all that, I'd still have to worry about maintaining my vintage house, and those are expenses that I know nothing about for Detroit. In Virginia, it costs me a small fortune every time I need to have something done to my house.

The agent said that the house on Parkside Street was not a homestead and that if it were, the taxes would be 30% less. I already own a house in Virginia, which I'm not planning on selling, so I don't know if I would even qualify for the lower tax rate. From what I've read on this forum, trying to get your taxes lowered is quite an ordeal and often an exercise in futility. To make matters worse, I was told that the property taxes go up every time the property has a new owner. If this is true, I might not even know what the new amount would be until AFTER I bought the house. Do I have the right information about all of this?

[313WX]

A lot of people don't pay property taxes [[they either avoid them completely or they're renting), and many people also work under the table [[including in the drug trade).

[thomprod]

Not really an issue for me. As a homeowner who itemizes, property taxes are deductible on my tax return. They're not a separate payment, either, as they are paid as part of my mortgage. payment.

[animatedmartian]

A lot of people don't pay property taxes [[they either avoid them completely or they're renting), and many people also work under the table [[including in the drug trade).

Yes. Palmer Woods is primarily filled with drug lords with modest taste.

Contrary to popular belief, Detroit does have residents with salary jobs. There's probably a good portion related to auto-industry work, but there's plenty of other fields that college educated people have gotten and maintained while also choosing to stay in Detroit.

But people who do pay taxes won't hesitate to let you know how frustrated they are with how the city handles money. Especially with the lack of services that they can provide with the amount of taxes they pay.

[corktownyuppie]

I have reluctantly given up on La Salle Gardens as a decent neighborhood to live in. I've come across a lovely house on Parkside Street near the golf course, a street which looks like a treasure trove of architectural delights. It's a 4,200 square-foot house and appears to be in really good shape. How is this neighborhood when it comes to safety? I contacted the listing agent to find out about the property taxes, and he said they were $6,800 a year! My question to you guys who own property in Detroit is...

What kind of jobs do you have that allow you to pay such high property taxes?!

It seems that you'd have to be making at least $80,000 a year to be able to afford taxes like these. And after paying these taxes, I learned that in neighborhoods like Palmer Woods, the city doesn't even remove snow from the streets. That expense is paid by the neighborhood association, which charges residents an additional $495 a year. On top of all that, I'd still have to worry about maintaining my vintage house, and those are expenses that I know nothing about for Detroit. In Virginia, it costs me a small fortune every time I need to have something done to my house.

The agent said that the house on Parkside Street was not a homestead and that if it were, the taxes would be 30% less. I already own a house in Virginia, which I'm not planning on selling, so I don't know if I would even qualify for the lower tax rate. From what I've read on this forum, trying to get your taxes lowered is quite an ordeal and often an exercise in futility. To make matters worse, I was told that the property taxes go up every time the property has a new owner. If this is true, I might not even know what the new amount would be until AFTER I bought the house. Do I have the right information about all of this?

You do have the right information on this, but you probably need some context to make sense of it all.

- Yes, $6,800 is a lot of taxes every year. But consider that a 4,200 square foot home in parts of Ann Arbor, Birmingham would cost north of $400,000-$500,000, depending on location...and then you'd still be paying $4,000 per year in taxes there. Where as in Detroit that same property might only cost $125,000. So yes, the taxes are twice as high, and the services you get are almost nothing. But then you're also paying a $500 mortgage payment instead of a $2500 mortgage payment every month.

- If you aren't earning $80,000 per year, a 4,200 square foot home is probably gonna be pretty iffy. Taxes aside, you're looking at homes that were built 90-100 years ago and many require years of overdue maintenance.

- It sounds like you're looking for a nice house in safe neighborhood. Lafayette Park or Corktown are safe neighborhoods that have homes that might be a little more in your price range.

Best of luck!

[Goose]

sorry, there is no way you can maintain and update and heat an older home with 4,200 sq. ft. on a salary of under 75,000... the heat bills in the cold of january could run $1000 alone with some of these older homes with minimal insulation and older windows....

[313WX]

Yes. Palmer Woods is primarily filled with drug lords with modest taste.

Contrary to popular belief, Detroit does have residents with salary jobs. There's probably a good portion related to auto-industry work, but there's plenty of other fields that college educated people have gotten and maintained while also choosing to stay in Detroit.

But people who do pay taxes won't hesitate to let you know how frustrated they are with how the city handles money. Especially with the lack of services that they can provide with the amount of taxes they pay.

The city is much bigger than Palmer Woods, Rosedale Park and Sherwood Forest [[What's that? 3 sq. miles out of a 143 sq. mi. city?).

That said, I can't imagine, looking at the city as a whole, too many people paying property taxes, or are even paying a mortgage on a home to pay property taxes on, when the per capita income is only $15,000 and the median taxable income is less than $30,000. Out of 350,000 homes, only half are officially owned [[and again, that's not factoring in other nuances such as the home owner renting out the property or carpetbaggers). So you do the math...

Furthermore, out of all the Detroit adults over 25, only 12% have degrees. So, that's less than 50,000 out of over 300,000 people.

That said, you may be right about the manufacturing work. But again, I doubt they're too many after factoing in just under 200,000 people live below poverty.

[313WX]

sorry, there is no way you can maintain and update and heat an older home with 4,200 sq. ft. on a salary of under 75,000... the heat bills in the cold of january could run $1000 alone with some of these older homes with minimal insulation and older windows....

If anything, these are probably folks who have lived in these homes for decades and have paid them off. I can't imagine paying a mortgage and being able to afford these homes unless you make upwards of six-figures. And quite frankly these homes were only made for people who made that type of money.

Then again, many of the homes in Detroit's best neighborhoods are still vacant, probably because people who purchased them couldn't afford them or they were older folks who passed away.

[Eric_c]

Remember to take in to your calculations the fact that the homes you're looking at are homes originally built for and intended to be maintained by the wealthy. In Detroit, you can have a millionaire's home for nothing, but the reality is, you need a millionaires budget to properly maintain these now all nearly century old beauties.

Additionally - HEATING. Big, big money to heat 4,000 antique squares.

So consider this - Detroit was so wealthy once upon a time, that most of our "average" homes are knock-out stunners filled with architectural delights, tall ceilings, big rooms, etc.

In fact, a typical Detroit duplex or two-family flat dripping with Golden Oak and swinging kitchen doors and beams in the dining room ceiling, fireplaces, leaded glass, etc. etc may be the best bet for a lot of people and they don't even know it.

With rents what they are these days, let the other unit pay your mortgage for you!

[animatedmartian]

The city is much bigger than Palmer Woods, Rosedale Park and Sherwood Forest [[What's that? 3 sq. miles out of a 143 sq. mi. city?).

That said, I can't imagine, looking at the city as a whole, too many people paying property taxes, or are even paying a mortgage on a home to pay property taxes on, when the per capita income is only $15,000 and the median taxable income is less than $30,000. Out of 350,000 homes, only half are officially owned [[and again, that's not factoring in other nuances such as the home owner renting out the property or carpetbaggers). So you do the math...

Furthermore, out of all the Detroit adults over 25, only 12% have degrees. So, that's less than 50,000 out of over 300,000 people.

That said, you may be right about the manufacturing work. But again, I doubt they're too many after factoing in just under 200,000 people live below poverty.

The OP had only mentioned looking in Palmer Woods and La Salle. So I assumed everything was in response to those particular neighborhoods. If City Airport and Brightmoor were included, I didn't catch it. My bad.

[ResurgetCineribus]

Some posts above have hit it on the head, if you are looking into buying a 4,200 sqft historic home and are concerned about the taxes, you're already way over your head. As far as how other people afford them, you'll probably be surprised how many normal, professional people will be living on your street.

[swingline]

I have reluctantly given up on La Salle Gardens as a decent neighborhood to live in. I've come across a lovely house on Parkside Street near the golf course, a street which looks like a treasure trove of architectural delights. It's a 4,200 square-foot house and appears to be in really good shape. How is this neighborhood when it comes to safety? I contacted the listing agent to find out about the property taxes, and he said they were $6,800 a year! My question to you guys who own property in Detroit is...

What kind of jobs do you have that allow you to pay such high property taxes?!

It seems that you'd have to be making at least $80,000 a year to be able to afford taxes like these. And after paying these taxes, I learned that in neighborhoods like Palmer Woods, the city doesn't even remove snow from the streets. That expense is paid by the neighborhood association, which charges residents an additional $495 a year. On top of all that, I'd still have to worry about maintaining my vintage house, and those are expenses that I know nothing about for Detroit. In Virginia, it costs me a small fortune every time I need to have something done to my house.

The agent said that the house on Parkside Street was not a homestead and that if it were, the taxes would be 30% less. I already own a house in Virginia, which I'm not planning on selling, so I don't know if I would even qualify for the lower tax rate. From what I've read on this forum, trying to get your taxes lowered is quite an ordeal and often an exercise in futility. To make matters worse, I was told that the property taxes go up every time the property has a new owner. If this is true, I might not even know what the new amount would be until AFTER I bought the house. Do I have the right information about all of this?

Antonio, a $6,800 tax bill is about right for a house in Detroit with a market value of $200k that also qualifies for a homestead exemption, meaning that the owner certifies to the state that the home is being used as the owner's primary residence/domicile. And yes, if a property doesn't qualify for the homestead exemption, the taxes would be about 30% higher. This applies statewide, not just in Detroit. If the property is not currently receiving the homestead exemption, that means that the city is valuing the property at approximately $165k.

Under state law, the tax assessment of a property adjusts in the year following a sale of the property. The adjustment takes into account the sale price of the property and sale prices of similar properties in the neighborhood. Most University District sale prices [[even non-foreclosure sales) have fallen below $200k since the Crash. If you buy the Parkside property for less than $200k and occupy it as a primary residence, the taxes should go down. If you buy it as an investment, you will have to pay less than $165k in order for the taxes to go down. However, if the property is a foreclosure sale and has some sort of bargain basement price, the taxes won't get reduced all the way to exactly reflect the low, low sale price. Assessors do not treat foreclosure sale prices as accurate indications of true market value. The floor for taxes in the University District is probably $4000-$4500.

Other posters' comments about the costs of owning a large 1920's home in Detroit have been good ones. Such a home will have an annual gas bill of of $4000-$5000 unless it has received major insulation upgrades or has had an ultra high efficient boiler installed. Ownership of these homes involves a lot more cost than the mortgage payment. Good luck on your search.

[Parkguy]

You can get an energy audit for not much money, and there are all kinds of state, city, and federal programs that will let you upgrade insulation and windows for huge discounts or tax credits. Old steam or hot water radiant heat is actually very efficient. So if you have a somewhat effecient boiler, it is way cheaper to heat that way than using forced air.

That being said, I agree with corktownyuppie and eric_c. When I moved to Detroit from the suburbs years ago, I compared houses, not taxes. My mortgage and tax bill [[including income and property taxes) added up to the same total per year as I would have had in a much smaller home with zero character in the suburbs. Those people who bought their homes during the over-inflated real estate years found themselves with huge tax bills, but even those were moderate compared to some places around the country.

Rosedale Park is a tax increment zone [[and there are others in the city), where tax rates are capped and are much more in line with other metro communities, and you get much more house for your money.

[softailrider]

You do have the right information on this, but you probably need some context to make sense of it all.

- Yes, $6,800 is a lot of taxes every year. But consider that a 4,200 square foot home in parts of Ann Arbor, Birmingham would cost north of $400,000-$500,000, depending on location...and then you'd still be paying $4,000 per year in taxes there. Where as in Detroit that same property might only cost $125,000. So yes, the taxes are twice as high, and the services you get are almost nothing. But then you're also paying a $500 mortgage payment instead of a $2500 mortgage payment every month.

- If you aren't earning $80,000 per year, a 4,200 square foot home is probably gonna be pretty iffy. Taxes aside, you're looking at homes that were built 90-100 years ago and many require years of overdue maintenance.

- It sounds like you're looking for a nice house in safe neighborhood. Lafayette Park or Corktown are safe neighborhoods that have homes that might be a little more in your price range.

Best of luck!

Those four or five hundred thousand dollar houses in Birmingham you refered to are going to be taxed way higher then the 4000.00 you mentioned. Probably closer to or higher then 10,000.00 a year would be my estimate. That would also be taking into account a drop in assesments over the last few years.

[canuck]

Those four or five hundred thousand dollar houses in Birmingham you refered to are going to be taxed way higher then the 4000.00 you mentioned. Probably closer to or higher then 10,000.00 a year would be my estimate. That would also be taking into account a drop in assesments over the last few years.

You're right softailrider, look at the tax valuation in Birmingham here:

http://www.ci.birmingham.mi.us/index.aspx?page=1086



I find the city taxes pretty high in Birmingham. I assumed the city rates were similar to ones we have here, but they look on the face of it to be twice as high!?

[szla]

A panel discussion after the mayor's speech said only 14% of property owners are paying their property tax bill. True or not?

[Bham1982]

I find the city taxes pretty high in Birmingham. I assumed the city rates were similar to ones we have here, but they look on the face of it to be twice as high!?

Birmingham has sky-high taxes. Probably the highest in metro Detroit outside of the Detroits and Pontiacs of the region.

The upside is you get a lot for your money. Tons of parks and rec, amazing snow removal, and urban gems like the Shain Park.

It's debatable whether Birmingham is a deal, though. You get a ton of services in Bloomfield Township too, and much lower taxes.

And, in Troy, you get very good [[but not Birmingham-good) services, and super-low taxes. Troy is probably better dollar-for-dollar than most Oakland County suburbs.

[Bham1982]

A panel discussion after the mayor's speech said only 14% of property owners are paying their property tax bill. True or not?

Most folks don't actually have to pay property taxes in Detroit. The city won't seize your home for two years, and, at that point, you can just buy it back from the city in most cases.

[antongast]

And, in Troy, you get very good [[but not Birmingham-good) services, and super-low taxes. Troy is probably better dollar-for-dollar than most Oakland County suburbs.

Yeah, but then you have to live in Troy.

[Bham1982]

Yeah, but then you have to live in Troy.

True, but there are parts of Troy basically indistinguishable from parts of Birmingham [[far southwest Troy).

And far northwest Troy basically looks like Bloomfield Township.

[DetroitPlanner]

I find it funny that someone wants to buy a 4,200 sq ft home as a non-homestead and is complaining about the cost.

[Bham1982]

I find it funny that someone wants to buy a 4,200 sq ft home as a non-homestead and is complaining about the cost.

I would agree.

How can someone contemplate buying what is essentially a mansion, and then not even have a household income of 80k? Even if the damn house were free, I would not be able to stomach that cost and commitment at or below that salary level.

If you have a middle class income, why not buy a middle class house? Unless you have a huge household, you can live very well in half the size [[or considerably smaller).

[canuck]

I would agree.

How can someone contemplate buying what is essentially a mansion, and then not even have a household income of 80k? Even if the damn house were free, I would not be able to stomach that cost and commitment at or below that salary level.

If you have a middle class income, why not buy a middle class house? Unless you have a huge household, you can live very well in half the size [[or considerably smaller).

Agreed, and also the monster home phenom is just as unreasonable. A lot of houses in my municipality are either torn down or added on to, and are double or triple the initial house. Even with a home office and double garage and whatnot, it seems strange when families are smaller to build huge homes even if they are decked out with the most energy efficient features.

I cant imagine wanting that much more space to live in once the kids leave home, but then again, maybe I'm not ambitious enough.

[DetroitPlanner]

Agreed, and also the monster home phenom is just as unreasonable. A lot of houses in my municipality are either torn down or added on to, and are double or triple the initial house. Even with a home office and double garage and whatnot, it seems strange when families are smaller to build huge homes even if they are decked out with the most energy efficient features.

I cant imagine wanting that much more space to live in once the kids leave home, but then again, maybe I'm not ambitious enough.

Agreed. The cost of painting a 4200 sq ft home is 3 times what the cost of a 1,400 sq ft home would be. I could not imagine paying 3 times the cost of everything I'd need to do for my home. Replace the roof? 3 times more expensive. Windows? again more expensive. Utilities... more expensive... it goes on and on. Buy a home you can afford. Don't be a putz.

[detroitsgwenivere]

I know at least 3 groups of friends who own large homes in Boston Edison and Palmer Woods. Several people all paying into the cost and upkeep of the houses. I did energy assessments for all of them to help lower the costs of their utility bills, which are indeed the largest portion of the financial burden. But to save 30% of the yearly bill, they'll have to pony up about 15k-20k on efficiency upgrades.

If you're household isn't pulling in at least 60k a year, you might as well aim for a house 2500sq. ft or less.