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State of Michigan Property Taxes

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State Tax Summary
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The state of Michigan names the real property tax Ad Valorem Tax and the official value standard states that true cash value “means the usual selling price that could be obtained for the property at private sale, and not at auction or at forced sale.” The property tax is levied on the market value. Real and personal property is taxed by local taxing entities. In addition, local entities may levy three additional ad valorem taxes and the state government may levy three additional ad valorem taxes. Local entities may authorize eight different types of taxes instead of ad valorem property taxes. Some of the different types of taxes were created to reduce taxes on individuals as an economic development tool. The state of Michigan offers a website that will estimate property tax using 2006 mileage rates. Enter the property taxable value or 50% of the home value, the county, the city or village and the school district. Mileage rates are those levied and billed in 2006. Rates for 2007 will be posted in July 2008. https://treas-secure.state.mi.us/ptestimator/PTEstimator.asp

Personal exemptions are for homeowners, renters, seniors, those with disabilities and veterans.

The Chicago Area Service Center (ASC) and the Satellite Office in Detroit, Michigan provide tax service for Michigan.

Responsible agency

  • Michigan Department of Treasury
  • State Tax Commission
  • 430 West Allegan
  • Lansing, Michigan 48922
  • Voice (517) 373-0500
  • FAX (517) 373-0633

Property tax calendar

Assessment date

December 1

Valuation Notice Date

Notices are sent annually in March

Appeal Deadline

30 days from date of mailing of notice or December 31

Bill Payment Date

Two billings; two installments: summer varies but majority are due September 14; winter varies but majority due from December 31 through February 28.

Property tax rates and dates

Contents

Annual assessment of real property

Yes

Classification of property

All assessed at 50%

Collections

Taxes are collected one year in arrears

Fiscal year

July 1 through June 30 for school districts; January 1 through December 31 for counties, local cities and townships

Level of government responsible for assessment

City, Township, Village, School District

Reassessment cycle

Every 4 years

Tax Calculation Rate

True Cash Value x 50% = Assessed Value or Taxes Due

Residential Exemptions

Exemption claims must be filed to receive exemption from specially treated property.

Circuit Breaker

The Circuit Breaker program is also known as the Homestead Property Tax Relief program. Property taxes collected for school districts are reduced to six mills for homestead and 24 mills for commercial, and qualified homeowners must apply with an affidavit to the local tax collector and applicant must occupy the property as a principal residence. Homeowners and renters may qualify if they are 1.) Age 65 or older and the surviving spouse of a senior citizen; if household income less than $3000 then entire property tax is refundable; 2.) Quadriplegic and paraplegic persons; 3.) Totally and permanently disabled person under the age of 65 years of age; 4.) Veterans, active military, blind persons and surviving spouses of veterans; or 5.) All other renters and homeowners. Renters may base their property tax deduction as 17% of the rent for one year and deduct from their state income tax if they do not qualify for one of the categories listed above. Homeowners may received a credit on their Michigan state income taxes for property taxes equal to 60% of the tax amount that exceeds 3.5% of their household income. Households are not eligible for a property tax credit if their income is totally from Aid to Families with Dependent Children, State Family Assistance or State Disability Assistance.

Veterans

An application may be approved for an honorably discharged disabled veteran in a principal residence that requires adapted housing because of disability.

Commercial Exemptions

Agriculture Personal property exemption

Property used for agriculture operations and farm implements; farm food products in storage; beet sugar held by processors; qualified agriculture property may be exempt from school tax; nursery stock; and evergreen trees, shrubs, bushes and vines growing on agricultural land may be exempt.

Conservation property

A taxpayer must file a declaration with the local county assessor to claim an exemption for a seawall, jetty, groin or dike for the control or prevention of flooding or erosion caused by waters in the Great Lakes or connecting tributaries.

Enterprise zones

New and existing businesses may qualify for a city granted property tax exemption if they locate in economically distressed areas approved as an Enterprise Zone before 1994 and is exempt through the year 2004; or may qualify for exemption for 6 to 15 years. Qualified businesses may be subject to a specific tax. A local district may exempt all new personal property for an eligible business in a distressed area.

Pollution control property

A taxpayer must file a declaration to exempt property used exclusively for water or air pollution control.

Rehabilitation district

Local governments may grant abatements and establish obsolete property rehabilitation districts for up to 12 years for rehabilitated commercial property and commercial housing property located in rehabilitation districts. To qualify for tax abatements the commercial property must be used to manufacture and process good or materials, conduct high-technology activity, and create or synthesize biodiesel fuel.

Tax Collector and Officials

Michigan has 1,242 township treasurers. All treasurers are elected to four-year terms, in same year as presidential election. Michigan has 83 County Treasurers, elected every four-years, in same year as presidential election. About 10% of City Treasurers are elected to four-year terms, in same year as gubernatorial election; remaining 90% of City Treasurers are appointed. The county treasurer is the ex-officio collector in all counties. County Assessors maintain and set property valuations. The County Auditor certifies property valuations. The County Treasurer collects current and delinquent property tax.

Forms

Specific deduction claim forms are available from

  • Michigan Treasury Department
  • Property Tax Division
  • 430 West Allegan
  • Lansing, Michigan 489222
  • http//www.id.gov/icpr/webfile/formsdiv/dlgf.html .

Forms due dates

Applications for deductions against real property must be filed with an affidavit to the local tax collector in Michigan by May 1 and must be filled again if the property changes owners. All deductions for real property require that the ownership must be recorded as of March 1 of the assessment year for taxes payable the following year. Manufactured and mobile homes, on private land, must be owned by December 1 to be eligible for the deductions to be applied to the tax bill for that year and is taxed as real property. A $3 per month fee is included in mobile home park lot rent. The mobile home park owner must deliver this fee to the taxing authority.

State assessor's manual

  • Michigan State Tax Commission Assessor’s Manual
  • State of Michigan Treasury Department
  • Property Tax Division
  • 430 West Allegan
  • Lansing, Michigan 48922
  • Phone (517) 373-0674
  • Price $25.00

How property tax determined

Residential property is assessed at 50% of market value and the assessor determines the fair market value. The assessor may use one of three methods.

Cost Approach

At current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when there are no sales of comparable properties.

Income Approach

For an apartment or office building, estimate how much income the property can produce.

Market Approach

Use other comparable properties that have sold recently, determine the most probable sales price of the subject property.

Appeal Procedure

First

Try to resolve the problem in an informal meeting with the tax assessor in the local county, after receiving an assessment notice.

Second

Next, if not satisfied with the informal meeting, file a formal appeal with the Local Government Board of Review.

Third

If not satisfied, appeal in writing to the Michigan Tax Tribunal. .

Fourth

If not satisfied, request a hearing before the county’s Circuit Court where the property is located.

Additional tax classifications

Agricultural property tax

Agricultural is Class III and assessed at 50% of assessed value.

Commercial property tax

Commercial is Class IV and assessed at 50% of assessed value. Industrial is Class V and assessed at 50% of assessed value.

Development property tax

Development is Class VII and assessed at 50% of assessed value.

Personal property tax

Personal property is Class II and taxed at 50% of assessed value.


Additional tax bills and charges

Construction Work in Progress

An occupancy tax is imposed in Idaho in lieu of property tax, on all new construction during the construction year. The tax amount is the same as if the structures were on the assessment rolls on January 1, but prorated for portion of the year based on occupancy

Corrected bill

When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a correct bill is issued when the corrections are made. Corrected bills are also issued when levy rates are wrong; the house is on the wrong tax lot and for homeowner exemption.

Delinquent taxes

Delinquent balances are applied to subsequent bills. A taxpayer may apply to have late charges, interest and property taxes canceled due to undue hardship or property damaged by a casualty loss event. No notices are sent for delinquent taxes in Michigan.

Penalty and Interest charges

2% penalty on each installment missed. Interest is 1% each month on the amount due when taxes are delinquent for more than one year.

TIF

Tax Increment Financing (TIF) taxes can be assessed by the county board for specific purposes as deemed necessary. Some counties combine TIF taxes with the tax bill; other counties have a separate billing.

Current Legislation and Pending Issues

References





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