Detroit property tax assessments to drop again

[MSUguy]

Many Detroit homeowners will see their property tax assessments drop 5%-15% this year, although bustling downtown and Midtown will see an increase of 5%, city officials said this afternoon.

It's the latest adjustment in Detroit's three-year effort to reassess every one of the city's 220,000 homes, something that Detroit's chief assessor, Gary Evanko, said the city hasn't done in at least 45 years. Officials want to ensure property tax assessments more closely match home sale prices in a city deeply scarred by the subprime mortgage foreclosure crisis.

City officials said large portions of the northwest, north and northeast sides will see 15% reductions, while the southwest, near west and lower east sides will see reductions around 5%. But some of the city's more stable neighborhoods -- Boston-Edison, Indian Village and Sherwood Forest -- will see increases of 15%, reflecting rising sale prices. But assessments on 95% of homes in the city will go down


http://www.freep.com/story/news/loca...gain/79644748/

[ABetterDetroit]

72% actually paid them in 2015 per the article. Careful someone is going to think its a good time for a millage increase with lofty numbers like that.

[ndavies]

This is a just a patch, Not a real solution to the problem. While they need do need to fix the appraisals, they really need to cut the Millage rates. The high millage rates are one of the factors keeping down home values.

[Honky Tonk]

Looks like Dug-in is shooting fish in a barrel again. Neighborhoods where the City doesn't have a snowball's chance in hell of ever collecting taxes, will see a significant decrease, while neighborhoods where people take pride in their homes and neighborhoods, by investing heavily in maintenance and upkeep, will get hit with a tax increase. These people are less likely to just walk away, and another tax increase will discourage potential buyers. It's a win-win for the City. Make that sitting ducks instead.

[Hermod]

This is a just a patch, Not a real solution to the problem. While they need do need to fix the appraisals, they really need to cut the Millage rates. The high millage rates are one of the factors keeping down home values.

Home insurance premiums
Auto insurance premiums
Property crime rate
Violent crime rate
Sad state of DPS

[Shai_Hulud]

Looks like Dug-in is shooting fish in a barrel again. Neighborhoods where the City doesn't have a snowball's chance in hell of ever collecting taxes, will see a significant decrease, while neighborhoods where people take pride in their homes and neighborhoods, by investing heavily in maintenance and upkeep, will get hit with a tax increase. These people are less likely to just walk away, and another tax increase will discourage potential buyers. It's a win-win for the City. Make that sitting ducks instead.

I agree, wasn't impressed with this last time.

[swingline]

This is a just a patch, Not a real solution to the problem. While they need do need to fix the appraisals, they really need to cut the Millage rates. The high millage rates are one of the factors keeping down home values.

Agree. Assessments aren't really the biggest problem. Perhaps in some neighborhoods that have experienced a lot of foreclosures with $5K sales to speculators there are scattered examples of nicer properties assessed with a $25K Taxable Value when it should be $17.5K. But that's less than $100 in "extra" taxes per year. An extra $100 is not causing anybody to move. And you can't drop assessments in the whole neighborhood to foreclosure sale levels. Don't forget, once the Taxable Value of a property is reduced, it can only be increased by the lesser of the rate of inflation or 5% unless it gets sold. The city gets screwed if the neighborhood values recover.

In the most expensive neighborhoods, Proposal A [[1995) locked in under-assessments which persist to the present. All of those Palmer Woods and Indian Village homes on the market in the past year for $500K have SEV's [[supposed to be 1/2 market value) and Taxable Values of less than $150K.

The millage is the actual elephant in the room that suppresses Detroit's real estate values. If somehow the millage could be legally reduced by one third to, say, the Grosse Pointe rates [[still on the high end), perhaps the participation rate would increase and also eventually lead to an overall increase in the citywide cumulative Taxable Value with correspondingly higher property tax revenues for the city. A legislative solution from Lansing would be necessary for this. Fiscally risky too because the only certain result is that the first few tax years after the millage reduction would cause decreased property tax revenues.

[mwilbert]

In the most expensive neighborhoods, Proposal A [[1995) locked in under-assessments which persist to the present. All of those Palmer Woods and Indian Village homes on the market in the past year for $500K have SEV's [[supposed to be 1/2 market value) and Taxable Values of less than $150K.

I'm pretty sure this is a misunderstanding of Proposal A. Proposal A doesn't affect SEV, it affects taxable value, which is capped by SEV. If the SEVs are too low, it is because of misassessment, not Prop A.

See, for example, the definitions in http://www.michigan.gov/taxtrib/0,16...6336--,00.html

[Milan1954]

I haven't been paying enough in taxes...my assessment went up $15k!?

[ndavies]

I haven't been paying enough in taxes...my assessment went up $15k!?

Challenge it, expect to lose at the city level. Challenge it again at the state level.

Of course the assessment change won't affect you very much until you go to sell. If you already own the property, the taxable value can only go up by the rate of inflation. Inflation is pretty close to zero according to the government.

[ABetterDetroit]

To be honest the most fubar thing about proposal A , [[ which there are many ) is the largest burden is focused on growing families that need to grow in a larger home so every time they buy they cycle to a full assesment at full rate because it is a new purchase.

[ndavies]

Let's not forget why the Prop A inflation cap was put in place. There was a huge number of tax increases in the 90s. Many elderly people were losing homes they had owned for years, due to runaway tax assessments.