Every year, homeowners in Michigan receive their property tax bill, and many feel frustrated when they see the number creeping up. Even in a stable market, property taxes don’t always reflect actual home values. It leads to the burning question: do property taxes ever go down?
While it’s uncommon, property taxes can decrease under certain circumstances. A drop in property value, a successful appeal, or local tax adjustments could mean a lower bill. However, these changes don’t happen automatically.
Understanding the property tax system can save you money. Let’s explore strategies that may help you reduce property taxes and keep more cash in your pocket.
Property Tax Basics: What It Is and How It’s Calculated
Property taxes help fund essential services in your community, such as fire departments and public schools. They are calculated based on the value of your home and land. An assessor will evaluate your property value and then apply the local tax rate to determine how much you owe.
The tax rate is often expressed in mills, with one mill equal to one dollar per thousand dollars of your property’s value. The higher your property value, the higher your taxes, although exemptions and deductions can help reduce the overall amount.
Can property tax go down legally?
While property taxes don’t often go down, there are legal ways to reduce them. Here are the main methods that may lead to a lower tax bill:
- Decrease in Property Value: When the value of your home decreases, it could lower your property taxes. For example, if there’s a market downturn or your home suffers damage, a reassessment could reflect this change, reducing the value and ultimately reducing your tax burden.
- Successful Appeal: If you think your property’s assessment is too high, you can appeal it. A successful appeal can lead to a reduced tax bill. You’ll need to present valid evidence, like comparable properties or condition reports, that support your case.
- Reassessment: A reassessment is an evaluation of your property’s current market value. If your property value drops during this process, your property taxes will likely decrease as well. Keep track of when reassessments happen in your area to potentially lower your taxes.
- Changes in Tax Rates: Tax rates can fluctuate depending on the financial needs of your local government. A decrease in the tax rate can result in lower property taxes, even if your property value stays the same. Local elections can sometimes influence these changes.
Techniques of Lowering Property Tax
If you believe your property has been inaccurately assessed or your taxes seem too high, there are legitimate ways to address the issue. AmeriHome shares effective techniques to help you challenge or lower your property taxes.
Ask for Your Property Tax Card:
Request a copy of your property tax card from the local assessor’s office. This card details your property’s value and features. If there are errors, like incorrect square footage or features, ask for them to be corrected. These adjustments can lower the taxable value and, in turn, reduce your tax bill.
Don’t Make Significant Construction work
Avoid making significant improvements or adding new structures that increase your home’s value. Any additions, like a new deck or extra room, will raise your property’s assessment. This results in a higher tax bill. It’s best to wait on noticeable construction projects to keep your taxes low.
Limit Curb Appeal:
High curb appeal can increase your property’s market value, making your taxes go up. If you want to keep your tax bill lower, avoid landscaping projects or exterior updates that enhance your home’s exterior. Keeping things simple helps to avoid a spike in your home’s value and property taxes.
Research Neighboring Homes:
Investigate the value of nearby homes to ensure your property isn’t over-assessed. Compare your home’s assessment to similar properties in the neighborhood. If your home’s value seems out of sync with others, you may have a case to appeal the assessment and reduce your property tax.
Allow the Assessor Access to Your Home:
When the assessor visits your property, allow them to inspect it. Access lets them gather accurate information, which affects your property’s assessed value. Ensure the assessor has all the details they need to give your home an honest, potentially lower valuation. It can result in a tax reduction.
Walk the Home With the Assessor:
Be present when the assessor inspects your home. Walk through the property with them and point out any damage or issues that could lower your home’s value. It helps the assessor consider factors that might reduce your property taxes.
Appeal Your Tax Bill:
If you think your tax bill is too high, appeal the assessment. Gather data, like comparable home prices and sales, to support your claim. A successful appeal can lower your tax rate. It’s a process worth exploring if you feel the assessment is inaccurate.
Exemptions That Can Lower Property Tax
Property tax exemptions can help certain homeowners save money. If you qualify, you may reduce your tax burden significantly. Here are some common exemptions that could lower your property tax bill.
- Military Service: Veterans and active-duty military members may qualify for property tax exemptions. Some states offer full or partial exemptions. Eligibility depends on service history, disability status, or deployment location.
- Senior Citizens: Many states provide property tax exemptions for seniors. Homeowners over a certain age may qualify based on income or residency. These exemptions help reduce financial burdens for retired individuals on fixed incomes.
- Widows and Widowers: Some jurisdictions offer property tax relief to widows and widowers. These exemptions help ease financial strain after losing a spouse. Eligibility often depends on income, residency, or the deceased spouse’s military service.
- Disabilities: Homeowners with disabilities may qualify for tax exemptions. Some states provide full or partial relief based on medical conditions. Documentation, such as a doctor’s certification, may be required to receive the exemption.
- Income-Based: Low-income homeowners may receive property tax relief. Many local governments offer exemptions based on earnings. Applicants must prove financial hardship to qualify. It helps struggling homeowners afford their property taxes.
- Homestead: A homestead exemption reduces taxes on primary residences. Homeowners must occupy the property as their main home. This exemption lowers taxable property value, reducing the total amount owed in property taxes.
- Religious and Nonprofit Organizations: Churches and nonprofit organizations may receive property tax exemptions. These exemptions apply to buildings used for religious, educational, or charitable purposes. The organization must meet state-specific requirements to qualify for tax relief.
Conclusion
Understanding property taxes isn’t always easy. Assessments, exemptions, and appeals all require time, effort, and knowledge of the system. Many homeowners struggle with the complex process, leading to missed opportunities for tax reductions. Without proper guidance, you might end up paying more than necessary.
Instead of tackling this alone, consider working with Michigan’s property management experts. They can ensure you’re paying what’s fair. Contact us today to explore ways to lower your property taxes!
Frequently Asked Questions
Can property taxes go down over time?
Yes, property taxes can decrease if the assessed value of the property drops, tax rates are lowered, or the homeowner qualifies for exemptions or deductions.
What causes a decrease in property tax?
Property tax reductions can result from market value declines, successful assessment appeals, reassessments, tax rate changes, or qualify for exemptions.
How does a property reassessment affect taxes?
A reassessment adjusts the home’s taxable value. If the reassessed value is lower, the homeowner’s property tax bill may decrease.
Can economic downturns lower property taxes?
Yes, during economic downturns, property values may decline, leading to lower assessments and potentially reduced property taxes.
Do vacant or neglected properties have lower property taxes?
In some cases, a neglected or deteriorating property may be reassessed at a lower value, potentially leading to reduced property taxes. However, local tax laws vary.
