Property Tax Bill
Trying to get a better understanding of your property tax bill? You may find, after you figure it out, that you are over assessed and paying more than your fair share of property taxes. You have a legal right to appeal your property tax bill, to ensure that you are not paying more than your fair share of taxes.
Your property tax bill may have been called a "Notice of Assessment" or "Property Tax Statement", or something similar. In general, the Notice of Assessment tends to be out right confusing (Many people believe that cities do this on purpose so less people appeal their property taxes). For example, here in Michigan they report the Taxable Value, Assessed Value, Tentative Equalization Factor and the Current State Equalized Value on the Notice of Assessment. But, they do not actually just list their opinion of what your property is worth. Or how they calculate the annual taxes. They break it into Summer and Winter taxes. The ratios are appr 70/30 which makes it more confusing. It's not clear at all. More on how to calculate property tax.
A very important point here and this is universal across all states is that your property taxes are all calculated first and foremost off the Fair Market Value of your property. I.e. what it would sell for on the open market. So, your city starts off with what they think its worth (market value), than they apply their various ratio's to that value.
Property Tax Assessment
The property tax assessmentratio, sometimes referred to as the assessment ratio is critical. Cities/states take the value of your property (their opinion of it) and apply the assessment ratio to this value. So if your property is worth $1,000,000 and the property tax assessment ratio is 50% than the assessed value of your property is $500,000. $1,000,000 x .50=$500,000.
The assessed value is what they apply the tax rates too. These tax rates and sometimes referred to in form of millage rates or dollars amount per thousands. For example, you may pay 42 mills or you may pay $30 per $1000 of assessed value.
So if your assessed value is $500,000 and your tax rate is 42 mills you do the math like this:
- Millage example: $500,000 x .042(this is the millage rate)= $21,000 per year of annual property taxes.
- Per thousand example: $500 x $30= $15,000 of annual property taxes.
Again the property tax assessment ratio is very important. Each state has their own assessment ratio and each juridristic can have a different property tax assessment ratio as well.
So, what do you do if you city has your property overassessed? Which they very likely do,as it is widely reported that 60% of all properties are overassessed. You appeal it! The vast majority of people don't bother, mostly because they are completely ignorant of the process and how much money they could save. If you do more research you will find that it is not hard and it will not take that much time. If your thinking of appealing your residential property this is something you can do on your own. The savings can be significant as well, as they normally go on year after year. You could save thousands per year and if you learn how to prove overpayment in previous years you can qualify for a rebate/refund...
We can help you if you own either a commercial or residential property. On the residential side we have a couple of different programs from having our professional tax consults select the best comps for your appeal, to putting together a presentation booklet you can confidentially take to your assessor. You'll be surprised at how cheap we do this for, and it is completely custom for your specific situation. This is not a computer program but real appraisers that manually select the real estate comps for you. (click of the the link for more info on this sales comps )
On the commercial property tax side, we offera very flexible approach where we can either represent you on a full scale basis, via a contingency fee, to a flat fee for the more cost conscious person that wants to represent themselves in council meetings.
If you would like us to review your potential commercial property tax appeal please fill out this form so we can be better prepared when we call to discuss.
248 885-8797
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