Detroit News: Half of Detroit property owners don’t pay taxes

[oo7plyr]

The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city's taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2LXjGNZcq

[bopcity]

Not surprising given the extreme poverty and ridiculously high unemployment rate. Most people, particularly elderly residents on fixed incomes at best, would put a priority on surviving rather than paying taxes to the city in exchange for what many see as next-to-nothing, particularly in light of the Kwame escapades. That said, the article below puts the matter more in perspective.

Tax scofflaws are emboldened because city residential assessments often bear little relation to reality, according to new research… Houses selling for about $2,300 were valued by the city at $42,000, more than 18 times their selling price, and some that went for $12,500 were pegged at $62,000 by the city, their research found. Even homes selling for less than $100 were valued at nearly $46,000.

"When people don't perceive a tax to be fair, they don't pay," Skidmore said.

Detroit's property tax assessments are inflated, experts say
http://www.detroitnews.com/article/2...O01/302210393/

[Hermod]

Detroit's property tax assessments are inflated, experts sayhttp://www.detroitnews.com/article/2...O01/302210393/

I have always felt there should be a law that states that if a governing body presents you a tax bill based on an ad valorum assessment, you should be able to challenge the gummint entity to then purchase the property for that amount. In other words, if the gummint says you owe so much in the way of taxes because this is a $62,000 house, you should be able to say, "OK, give me the $62,000 and I will give you the keys".

[Novine]

"I have always felt there should be a law that states that if a governing body presents you a tax bill based on an ad valorum assessment, you should be able to challenge the gummint entity to then purchase the property for that amount."

That's about the dumbest thing you've ever said here.

[bopcity]

Perhaps not the wisest solution but it's not any dumber than the seemingly random value assessments on the properties in question. A home selling for less than $100 being valued at nearly $46,000?

How would a tax assessor come up with such a figure?

[Novine]

Assessments aren't based strictly on sales price. Otherwise, every foreclosure or short sale could be used as a basis to claim that ones house should only be taxed at $100.

[Gannon]

From what I've heard over the years about the lack of record-keeping and general mismanagment of the database and files, I dare to doubt the validity of this analysis. Same with the income expected out of the 36th District Court records. All vapor at this point.

[Shollin]

Do people think over assesments are exclusive to Detroit? When I sold my home in Harper Woods, the SEV was 45,000 down from a high of 75,000. The city felt my house was worth 90,000. I sold it for 40,000. I wish I could've just stopped paying taxes.

[JBMcB]

Do people think over assesments are exclusive to Detroit? When I sold my home in Harper Woods, the SEV was 45,000 down from a high of 75,000. The city felt my house was worth 90,000. I sold it for 40,000. I wish I could've just stopped paying taxes.

You can appeal the assessment to the city. When we bought our home the city tried to asses it for $10,000 over the already inflated sale price. I had it knocked down to $10,000 below sale price by showing them how much work the house needed [[it hadn't been occupied for almost a year.)

[Shollin]

You can appeal the assessment to the city. When we bought our home the city tried to asses it for $10,000 over the already inflated sale price. I had it knocked down to $10,000 below sale price by showing them how much work the house needed [[it hadn't been occupied for almost a year.)

I did it appeal it. I got it knocked down a couple grand but the neighborhood was going to shit so I dumped it to an investor. I had lived in my house for 15 years at the time so it's not like it was empty and needed work.

[Hermod]

"I have always felt there should be a law that states that if a governing body presents you a tax bill based on an ad valorum assessment, you should be able to challenge the gummint entity to then purchase the property for that amount."

That's about the dumbest thing you've ever said here.

Not necessarily. It keeps the tax assessor honest. He isn't going to be going hog-wild on assessments if it means the gummint is going to end up with a bunch of properties which it over-valued.

My proposal [[while it isn't going anywhere) really puts the brakes on out-of-control civil servants. The mayor and the legislative branch of the city [[council, commission, aldermen, etc) is not going to be any too happy with an employee that was responsible for the city overpaying for a whole bunch of houses.

[mwilbert]

I actually don't think this is a completely ridiculous idea, but some significant adjustments would have to be made if you actually wanted to do it, because the way assessing is done is less accurate than a true appraisal, and there is a considerable time lag, and in any case appraisal isn't an exact science. If prices are moving rapidly, houses are going to be over- or under- assessed. Even if you kept assessments in line with market value, you would invite people to simply force the government to buy their house whenever they wanted to move--they could sell their house instantly, rather than go through all the bother of an agent, etc. And of course imagine if a meteor hits my house--I might prefer selling it at the assessed pre-meteor price to fixing it.

The correct way to fix this is to make the abatement process more effective, but if you want a safety valve, you could allow the owner to request [[and probably pay a fee for, to prevent frivolous requests) a re-assessment, and if the newly assessed value was too high for his taste, allow him to sell the house at a reasonable fraction of that price after some period of time.

This still leaves the question of how the government would afford these purchases, but at least they would be limited to cases of serious misassessment. Such cases do seem rampant in Detroit though.

[Novine]

"Not necessarily. It keeps the tax assessor honest. He isn't going to be going hog-wild on assessments if it means the gummint is going to end up with a bunch of properties which it over-valued."

You've said something even dumber? It would do nothing of the sort. It would force the assessor to low ball every property because there's speculators by the dozen that would scoop up properties for nothing at the tax sale and turn around and demand to get paid thousands for these properties.

[drjeff]

The citizens are just following the lead of city council in not paying property taxes.

[Lowell]

...Detroit Property Owners Don’t Pay Taxes

What a Detroit-bashing and misleading headline written by the Detroit News.

Half of the property owners are DELINQUENT. They ALL pay taxes but in this case they are late.

Huge difference. One can't be a property owner without paying taxes. Either they make payments within the allowed times, which allows for delinquency, and are property owners or they are foreclosed, their property is taken away and they no longer are property-owners. It's that simple.

It is akin to describing all who were ever late on a car payment as "Half of Car Owners don't make payments on their loans".

As for all that money, it is a receivable and will either be paid with interest [probably in most cases] or will be redeemed to some degree by foreclosure and eventual resale. There is nothing the city or any EFM can do about it other than changing the law to make the allowed delinquency limit shorter [it's three years I think].

It is almost a non-story because no effort was made to compare this with previous years, whether or not the current situation is better or worse, and how much of those delinquent taxes were eventually paid with interest.

[Shollin]

The article clearly states a lot of them should have already been foreclosed but the county ignores them

[Kevgoblue]

Doesn't Detroit have one of the lowest levels of owner occupied properties in the state?
Just food for thought.

[detroitsgwenivere]

I know a few of these non tax paying citizens are still dealing with this snafu:


http://detroit.cbslocal.com/2011/01/13/city-of-detroit-sends-out-thousands-of-incorrect-property-tax-bills/

[SWMAP]

Lowell, how delinquent does someone have to be before you think its bad? Like the 45 year old man living on my street who still gets his garbage collected and has ambulance service - but who has not paid any property tax since 2007, with no sanctions at all?

Or how about the lady around the corner who died in 2007 and her upstairs tenant just stayed on, never paying taxes and tearing apart the brick front porch for a campfire ring, for good measure. No taxes paid there since 2007 and the squatters are still there.

Those are categorized as "delinquent" - but they are five years cumulative old.

And, just for your information - delinquent is a serious thing because research demonstrates that the majority of property owners who become one year delinquent can never catch up.

So - I believe we do have a story here.

[softailrider]

The article clearly states a lot of them should have already been foreclosed but the county ignores them

County doesn't want them, worthless property in terrible areas. We're not talking Northville or Canton.

[mwilbert]

County doesn't want them, worthless property in terrible areas. We're not talking Northville or Canton.

I agree that is largely the case, but as I understand it the county isn't supposed to have that discretion. They should be doing the foreclosures and dumping the properties in the land bank.

[Lowell]

Lowell, how delinquent does someone have to be before you think its bad? Like the 45 year old man living on my street who still gets his garbage collected and has ambulance service - but who has not paid any property tax since 2007, with no sanctions at all?

Or how about the lady around the corner who died in 2007 and her upstairs tenant just stayed on, never paying taxes and tearing apart the brick front porch for a campfire ring, for good measure. No taxes paid there since 2007 and the squatters are still there.

Those are categorized as "delinquent" - but they are five years cumulative old.

And, just for your information - delinquent is a serious thing because research demonstrates that the majority of property owners who become one year delinquent can never catch up.

So - I believe we do have a story here.

There are no hairs to split. One either owns the property or they don't. If they do, they pay the taxes sooner or later or lose it. If one is delinquent since 2007, and I'll assume you have seen the record at city hall to back that up, he/she can be foreclosed. But until they are foreclosed they still own it and presumably could catch up.

If the governmental body is so dysfunctional that it doesn't foreclose [would never happen here of course ] that is a different story, maybe the real story. But being delinquent does not = "Property Owners Don’t Pay Taxes" as the headline misleads.

I am not sure of the law at this moment but it used to possible to be perpetually up to three years behind -- pay off that third year before three years expire and you are still alive for another year. Of course a stiff interest is piled on.

[AUSSIE]

The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city's taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2LXjGNZcq

Don't be alarmed, it sounds like Greece

Stand by for violent protests......

Cheers

[Shollin]

If you are delinquent on taxes you didn't pay taxes. This doesn't seem that hard.

[Hermod]

"Not necessarily. It keeps the tax assessor honest. He isn't going to be going hog-wild on assessments if it means the gummint is going to end up with a bunch of properties which it over-valued."

You've said something even dumber? It would do nothing of the sort. It would force the assessor to low ball every property because there's speculators by the dozen that would scoop up properties for nothing at the tax sale and turn around and demand to get paid thousands for these properties.

Enough with the insults, asswipe.

One way it could be done is that if you challenge the assessment and the city insists on the assessment, then they have to buy it. If they agree to lower the assessment, they get three tries to get it low enough so that you do not challenge the assessment. At the point the city says they will not go lower, then they have to buy it if you insist.