Detroit NEZ Tax Abatement

[Novine]

Once the NEZ break expires, I assume that the taxes will jump up to the rates that non-NEZ properties pay. I would expect that in advance of that, you'll get a lot of people pushing for some kind of extension or modification to that designation. But I wouldn't count on it. Detroit and the state need every tax dollar they can get. Check out this post, it has a contact name and number at the state for NEZ questions. Start by contacting them with your question about transferring the eligibility.

http://www.trulia.com/voices/Propert..._city_o-139989

[Mipade]

Perhaps the city of Detroit should give its citizens a little relief and start making the corporations operating in our city to pay their fare share for once!

[Detroitnerd]

Somebody has to pay taxes, right?

But here's how it works.

You can't tax the churches. They get to run tax-free enterprises, collect millions in donations and build ever-bigger churches. [[Their funding has kind of dried up, though, as the half-finished megachurches illustrate.)

Also, it's politically impossible to tax the big companies. We gotta throw tax abatement programs at them, give them money, spend on recofiguring the land to suit them, etc. As to whether they're "job-makers" or "wealth-creators" or just plain "parasites," that doesn't matter. The fact on the ground is that they don't have to pay. General Motors has had a lot of years when they haven't paid taxes, for instance.

We might be able to tax small businesses a bit, but their accountants are pretty clever, and they can cut their tax bill by, again, locating where we've given tax-abatement.

The other major employer is the city, which can't tax itself -- can it?

So, it falls onto the homeowners. Unless you're well-connected enough to have your appraisal "accidentally" adjusted so you don't have to pay them. Or, if you're rich enough, you can figure out ways to cut down the tax bill, perhaps by making "donations" to city "charities."

So, it falls upon the people least prepared to pay it. That means you, pal. What's the problem? Don't like it? Lump it. The most powerful people are not going to pay. Period. If you hate it, move. If you can stand it, you're a sucker. That's their attitude, I think.

If we all ran our families the way the city [[or, for that matter, the country) runs things, we'd have boss cars for the whole family, giveaways for mom and dad, presents for the older kids. The youngest kid would get the "tax bill." "Here you go, you gots to do your part, junior. We're all too important to this family to pay."

The kid would do what most people do in Detroit: Run away from home.

[Novine]

"Detroit needs to figure out what they need to do to make their tax rates slightly lower than the suburbs, not nearly twice as high. For EVERYONE -- Businesses, Individuals, etc."

Mission impossible Detroit500. Here is why. Homes in Detroit are worth about 1/5th to 1/10th what a typical home in the suburbs costs. A $20,000 home in Detroit is a $100,000 home in Hazel Park is a $250,000 home in Shelby Township is a $400,000 in Birmingham. For each tax dollar that is collected in a Shelby Township or Birmingham, Detroit has to have a tax rate 10 - 20 times that amount to collect the same dollar. Detroit also has a much greater need for service. In places like Birmingham or Shelby Township, you can get away with having a lot fewer police and firefighters and you don't have any of the social services that Detroit provides. To get Detroit city taxes down to the levels you talk about, you would have to lay off and shutdown almost the entire city government. We're not talking closing a few recreation centers or trimming staff, we're talking everything. Few cops, no firefighters and almost zero services. You'll have a tax rate as cheap as the suburbs and a city that absolutely no one would want to live in at any price.

[milesdriven]

When I purchased my house in Toledo last fall, the taxable value of my home was based on the purchase price. I pay about $1700 annually in taxes, and I purchased my home for 89K. Because of this system, many properties don't go to waste and rents are much more affordable as well. Until Detroit changes their asinine tax rates, many thousands of properties will go to waste and eventually be demolished with more taxpayer money. You can't squeeze blood from a stone.

[mwilbert]

When I purchased my house in Toledo last fall, the taxable value of my home was based on the purchase price. I pay about $1700 annually in taxes, and I purchased my home for 89K. Because of this system, many properties don't go to waste and rents are much more affordable as well. Until Detroit changes their asinine tax rates, many thousands of properties will go to waste and eventually be demolished with more taxpayer money. You can't squeeze blood from a stone.

The SEV system in use in Detroit is the normal Michigan system; it is not possible for Detroit to change it. I completely agree that the high property tax rates in Detroit are a huge obstacle to people buying property in the city, but the solution is probably not the adjusting the city tax system, but ruthless cutting of costs.

Novine is correct that the city just doesn't have the tax base per person that many other towns have, but his calculation about how deeply things would have to be cut is a bit pessimistic because of the differing levels of external aid Detroit received compared with other cities--in particular Detroit essentially pays nothing for its school system [[which is more or less what it is worth, but we already had a thread about that.)