Discuss Detroit Archives - January 2008 City taxes Previous Next
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Midtowng
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Username: Midtowng

Post Number: 2
Registered: 04-2008
Posted on Saturday, April 19, 2008 - 6:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

hello! i've been greatly perplexed by my tax situation as of late... i live in Midtown in an NEZ yet i'm still paying over $2500 a year in taxes! it doesn't make sense to me... does this make sense to anyone else out there???

wondering if there's anyone out there who can offer some tips on how to right this or if you know anyone who can help me... i'd be willing to compensate if they can help fix this problem...
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Malcovemagnesia
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Username: Malcovemagnesia

Post Number: 74
Registered: 12-2005
Posted on Saturday, April 19, 2008 - 8:02 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I wonder how often the Detroit income tax deters somebody from living or even taking a job within city limits?

It's not like residents are getting superior service by paying this extra tax.
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Mbr
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Username: Mbr

Post Number: 375
Registered: 03-2005
Posted on Saturday, April 19, 2008 - 8:09 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

What building or development do you live in? The NEZ is specific to the improvements made to the property. If you live in a previously occupied apartment building that was converted to condos you will have a higher tax burden compared to a development that was a substantial rehab or new construction. At least that's how I understand it. Also, you are not exempt from all taxes, you still need to pay the school debt service correct?
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Midtowng
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Username: Midtowng

Post Number: 3
Registered: 04-2008
Posted on Saturday, April 19, 2008 - 8:37 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

That is a good point Mbr (regarding other taxes like schools)... I live in the Stuber Stone building on Cass... When we first moved in, we were paying a certain amount, then after about the first year, our taxes got hiked up about $200 extra per month...
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7051
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Username: 7051

Post Number: 103
Registered: 02-2006
Posted on Saturday, April 19, 2008 - 11:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Your taxes went up after the first year because that is how Proposal A (1994) works in Michigan. The first year you are paying the millage rate(reduced for NEZ) X the old owner's capped/taxable value(approximately 50% of market value/sales price when the old owner bought + 3%/or inflation factor cumulatively for each year they owned the property).

After one year you are paying the millage rate(reduced if NEZ) X the old owner's uncapped value. This uncapped value now becomes your new taxable/capped value and (by Michigan law)will increase each year by the lesser of the inflation rate or 3%. There is also an uncapped value on your new 1 year bill that could increase more than inflation if the property is reassessed by an assessor. This value usually rises every year and when you sell, the new buyer will pay the millage rate X this uncapped value after THEIR first year of ownership.

March is the month of the year when taxable values, uncapped values, SEV's can be challenged at a tax review board. This process, although fairly simple once researched, could take another 15-20 paragraphs to fully explain.

The above property tax explanation is brief and could also include a lengthy explanation of its many quirks.

The best thing one could do if they have a heartbeat and live in Michigan, is pick up a copy of the taxpayer's guide which is usually available free at libraries, state rep offices, etc.
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7051
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Username: 7051

Post Number: 104
Registered: 02-2006
Posted on Saturday, April 19, 2008 - 11:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

P.S. If you go out and purchase a 3 bedroom ranch in most NEARBY burbs today, you are looking at an annual tax bill of 3,000-4,000. Their millage rates are low, but their taxable values/sevs are much higher than a similiar property in Detroit.
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Rid0617
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Username: Rid0617

Post Number: 70
Registered: 03-2008
Posted on Sunday, April 20, 2008 - 6:55 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

If you purchase one of the abandoned homes that need some work will the valuation go down because the property value is lower or is it still valued at the old rate when it was a good property? Hope that made sense. We're looking at homes that are selling for $5-$7,000.

(Message edited by rid0617 on April 20, 2008)
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Rid0617
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Username: Rid0617

Post Number: 71
Registered: 03-2008
Posted on Sunday, April 20, 2008 - 6:56 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

And I thought our current $780 for the house down here was high. Current home is 2100 sq ft modular home on acre of land. We bought it for $79,500 three years ago, property tax is $780. No city income tax down here. Still getting aware of the total picture before we decide to move.

(Message edited by rid0617 on April 20, 2008)
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Jerrytimes
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Username: Jerrytimes

Post Number: 131
Registered: 04-2007
Posted on Sunday, April 20, 2008 - 12:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I pay roughly $3000 a year in Roseville for a 1050 square foot house.
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Charlottepaul
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Username: Charlottepaul

Post Number: 2459
Registered: 10-2006
Posted on Sunday, April 20, 2008 - 1:21 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

It's likely (in fact almost probable) that the taxes that you pay are not based on SF, but on the value of the home.
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Pkbroch
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Username: Pkbroch

Post Number: 10
Registered: 02-2008
Posted on Sunday, April 20, 2008 - 1:29 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

A house in palmer woods bought before Headlee and so-called capped with a value of $ 350,000. would have taxes, city and county of $ 10,100. Even people who buy now still only get a 15-20% under NEZ so we have several houses in here with property taxes of $ 20,000. and are on the market with values of $ 450,000. if they can sell it.
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Rugbyman
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Username: Rugbyman

Post Number: 311
Registered: 06-2005
Posted on Sunday, April 20, 2008 - 1:47 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Malcove- that deterrent you're talking about is the main reason why my fiance and I aren't moving to the city any time soon. Even with the NEZ taxes are way out of line with the level of service. I'd love nothing more than to buy and restore/maintain a house in Palmer Woods, B-E, New Center, or Indian Village, but there's just no way we could afford to pay the taxes AND the various insurance increases over living in Berkley. 45 mils in a NEZ in Detroit versus 34 mils in Berkley, plus not having to pay out the ear for insurance and a 1 in 500 chance of being broken into (1 in 5 in Detroit- see city-data.com).

Pity. I was this close to talking the lady into it, then we got insurance quotes and yearly taxes are.

(Message edited by rugbyman on April 20, 2008)
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Malcovemagnesia
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Username: Malcovemagnesia

Post Number: 75
Registered: 12-2005
Posted on Sunday, April 20, 2008 - 4:46 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

@Rugbyman, yep... I didn't realize that this thread is focused on property taxes (and not the city income tax) until after I hit the post button on my first response. It's rough that homeowners in the city have to pay a premium to make up for their depressed property values.
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Gistok
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Username: Gistok

Post Number: 6672
Registered: 08-2004
Posted on Sunday, April 20, 2008 - 5:15 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jerrytimes, what year did you buy your Roseville house? I'm living in an 1100 sq. ft. ranch in SCS, and am paying only $2100 in property taxes... but then again, I've been here since 1990, and have had ALL the years of cummulative benefit from the 1994 Headlee Amendment.
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Steelworker
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Username: Steelworker

Post Number: 1090
Registered: 02-2004
Posted on Sunday, April 20, 2008 - 5:40 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

yeah my taxes this year in Oak Park are 2700 for 1200 square foot house but im sure it will go up next year.
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Bragaboutme
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Username: Bragaboutme

Post Number: 182
Registered: 02-2008
Posted on Sunday, April 20, 2008 - 7:21 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

My taxes this year in detroit for a 1300sq., was 650 for winter 1650 for summer. I guess it depends on where you live in the city.
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Trainman
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Username: Trainman

Post Number: 679
Registered: 04-2006
Posted on Sunday, April 20, 2008 - 7:49 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

There is relief in sight for high property taxes in Michigan. A change in the state constitution will allow county wide sales taxes. This will enable SMART and DDOT to get a sales tax and also the zoo and education and other government services.

This will not protect existing mass transit funding such as the ten percent of fuel and for matching state funds for federal transit grants.

This is presented in my website to educate the public.
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Rugbyman
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Username: Rugbyman

Post Number: 312
Registered: 06-2005
Posted on Sunday, April 20, 2008 - 7:56 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Your property's value is what's dependent on where you are in the city. How long you've been at your address is the other key component. How long have you been in your house, bragaboutme?

Unless I've done my math wrong, if your house was sold today, in order for the person buying your house to keep the same tax rate, you'd have to sell for about $35K. Is my math right? 2300 divided by 65 mills homestead non-NEZ rate? Liberal arts major here...
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Bragaboutme
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Username: Bragaboutme

Post Number: 184
Registered: 02-2008
Posted on Sunday, April 20, 2008 - 8:03 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Brought the house in 2005, Rugby. I think your math is correct too, but I am no accountant. I bought it for $56,000 if that helps.
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Rugbyman
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Username: Rugbyman

Post Number: 313
Registered: 06-2005
Posted on Sunday, April 20, 2008 - 9:06 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Durr. Forgot to multiply sale price by 2 since taxable value is half the market value. Your taxable value would be about $35k, which makes your house worth $70k (according to the city, anyway). Makes much more sense to me now :-) If you successfully appeal the value of your house for tax purposes, you'd probably save $300-400 per year, depending on the assessed value you get. Threadjack over.

(Message edited by rugbyman on April 20, 2008)
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Bvos
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Username: Bvos

Post Number: 2270
Registered: 10-2003
Posted on Sunday, April 20, 2008 - 10:06 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Midtowng,

Be glad you're paying only $2,600 annually. I'm paying $4,000 a year in Rosedale Park on a 1,300 s.f. two bedroom home. The Neighborhood NEZ was a joke compared to all the savings Kwame said we'd realize.

I do have one good thing to report: I recently called around for new homeowners insurance rates since the policy is coming due soon. When we bought 6 years ago the cheapest policy we could find was through Auto Owners for $1,300 a year. It's gradually gone down over the years to $900 last year. Got a random mailing last week from Farmer's Insurance. Called them and my policy is now a little over $600 a year for better coverage than what I was getting through Auto Owners! That's cheaper than my in-laws in Sterling Heights (who are now calling Farmer's for a quote as well). Car insurance is still something else, but at least the home owner's policies are getting reasonable in Detroit.
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Midtowng
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Username: Midtowng

Post Number: 4
Registered: 04-2008
Posted on Sunday, April 20, 2008 - 10:49 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

thanks everyone for your sobering, but helpful input...
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Jt1
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Username: Jt1

Post Number: 11505
Registered: 10-2003
Posted on Sunday, April 20, 2008 - 10:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

When considering your taxes don't forget that there are now two components: The taxes based upon the SEV and the $300 annual garbage fee.
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7051
Member
Username: 7051

Post Number: 106
Registered: 02-2006
Posted on Sunday, April 20, 2008 - 11:16 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Also, there may be a garbage fee but 3 mills for trash are no longer in effect. For some of us, there was a net increase, others a net decrease. Myself = $300 now vs. $214 before(71,800 taxable value X 3 mills(3X71.8=$214). Some others (Palmer Woods,IV,etc.) who had large taxable values(ex:200,000(200X3mills=$ 600)) are saving money.

Of course, my properties in Ferndale show a slightly more than $300 cost on their tax bills when one adds up the fees and mills that are due to trash. They pick up bulk every week, but you cannot just put out a mountain of trash like you can in Detroit(I know, technically Detroit has a 1 cubic yard bulk limit but this is still not enforced). Everything in Ferndale must also be tied, rolled, not exceeding 3-4 feet in length for carpet, ony small branches, etc., etc. What a pain in the ass! Detroit's claw trucks will take damn near anything on bulk day.
In Detroit one can also take one cubic yard per day (7 days per week) to the bulk yards for free. They do not allow construction debris, but Detroit residents may take construction debris to the Waste Management yard near Russell and Clay free of charge with a city license.

Bulk and regular garbage collection in Detroit seems to be one of the few really good city services, especially for what they take and the $300 cost in comparison with my tax bills in Ferndale.
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Rugbyman
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Username: Rugbyman

Post Number: 314
Registered: 06-2005
Posted on Monday, April 21, 2008 - 8:37 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Having lived in Ferndale, I can tell you for certain that the "tied and rolled" requirement is sporadically enforced, at best. We had two neighbors move out over the year we were on East Webster and both of them left mountains of trash on their curb, definitely not bound and rolled. It was all picked up- even the old mail that was blowing around.
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7051
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Username: 7051

Post Number: 107
Registered: 02-2006
Posted on Tuesday, April 22, 2008 - 12:03 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Surprising, I've had rolled, untied carpet not picked up multiple times. I've also received a ticket for 3 pieces of 3X5 paneling that they did not pick up "because it was construction debris" and left out for an extra day.
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Rugbyman
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Username: Rugbyman

Post Number: 316
Registered: 06-2005
Posted on Tuesday, April 22, 2008 - 8:42 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Maybe they were a little more lax on my "Sowf Side" of the city :-)

The scenery ain't so great four blocks off eight.
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Strathcona
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Username: Strathcona

Post Number: 5
Registered: 03-2008
Posted on Tuesday, April 22, 2008 - 8:54 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Pkbroch, I agree that this situation is unattractive for Palmer Woods as well as other areas with high assessment. Have you been able to get your SEV lowered?
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Swingline
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Username: Swingline

Post Number: 1099
Registered: 11-2003
Posted on Tuesday, April 22, 2008 - 9:43 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Relief for people with a "Palmer Woods problem" should be available this year if homeowners with that problem appealed their assessment. Like 90% of neighborhoods in SE Michigan, Palmer Woods has seen home values decline in the past two years. There have now been enough sales for taxpayers to use as evidence in a tax appeal. The Palmer Woods problem exists for almost anybody who bought a home in the 2004-2006 time period. All such homes would have had their assessments uncapped and set at 50% of the purchase price, and now their values may have declined by 20%. Anybody in such a situation who hasn't had their assessment reduced by the assessor should file an appeal. It's too late for this year though because filing deadlines have passed.
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Pkbroch
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Username: Pkbroch

Post Number: 13
Registered: 02-2008
Posted on Tuesday, April 22, 2008 - 11:33 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I appeal most years and get denied most years. Add this to the Detroit only utility tax on heat, electric,and income it's a good thing we like historic neighborhoods with great people.
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Swingline
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Username: Swingline

Post Number: 1101
Registered: 11-2003
Posted on Thursday, April 24, 2008 - 10:56 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Appeals are almost never won at the local review level. It is at the next level, the Michigan Tax Tribunal, where taxpayers can usually get the relief they are entitled to if their property value has dropped significantly below twice their taxable value.
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Detroitbill
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Username: Detroitbill

Post Number: 627
Registered: 09-2006
Posted on Thursday, April 24, 2008 - 1:12 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Folks , a great value in the city property tax wise is the co-ops in Lafayette Park,, Annual property tax assessments for the co-op townhouses ( approx 1400 sqare feet) is 900.00 , 1300 Lafayette is also preportionate..Great value,,for those outsiders who are deterred by high taxes, You wont find anything even close in the burbs..

(Message edited by Detroitbill on April 24, 2008)
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Detroitbill
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Username: Detroitbill

Post Number: 628
Registered: 09-2006
Posted on Thursday, April 24, 2008 - 1:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Taxes are crazy everywhere it seems, a good friend who lives in a 60s ranch (1800 sq feet) near Somerset Mall in Troy pays 7800.00. Another with a nice 1600 sq. foot colonial in Lathrup Village pays 6600.00 a year. The pain seems to be spread to many areas in Metro. Its not just a Detroit thing

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