# Property Taxes



## Lucky Dog (Jul 4, 2004)

Maybe I'm just venting, but it sure seems like that from a property tax standpoint, the state of Michigan sure does not want folks to buy a second home or property.

Been looking for a place to retire to in ten years or so. In the mean time use it as a weekend / vacation destination. Found a nice place, calculated the property tax and at today's rate alone with no increases, would have 70K into it in property taxes alone in ten years.

How do other states tax second homes?


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## sureshot006 (Sep 8, 2010)

From 2015 but pretty sure it's still relevant. 

https://taxfoundation.org/how-high-are-property-taxes-your-state/


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## Lucky Dog (Jul 4, 2004)

sureshot006 said:


> From 2015 but pretty sure it's still relevant.
> 
> https://taxfoundation.org/how-high-are-property-taxes-your-state/


Thanks, Hawaii here I come! LOL


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## sureshot006 (Sep 8, 2010)

Yeah... if one can afford the mortgage it would be great!


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## Liver and Onions (Nov 24, 2000)

Lucky Dog said:


> .......... Found a nice place, calculated the property tax and at today's rate alone with no increases, would have 70K into it in property taxes alone in ten years.
> ..........


Wow. $7000 a year, damn. 

L & O


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## plugger (Aug 8, 2001)

Lucky Dog said:


> Maybe I'm just venting, but it sure seems like that from a property tax standpoint, the state of Michigan sure does not want folks to buy a second home or property.
> 
> Been looking for a place to retire to in ten years or so. In the mean time use it as a weekend / vacation destination. Found a nice place, calculated the property tax and at today's rate alone with no increases, would have 70K into it in property taxes alone in ten years.
> 
> How do other states tax second homes?


 I know a few people that pay very little in property taxes but I wouldn't want their place!


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## retired dundo (Jul 21, 2015)

I know twp people going to retire in Tennessee.From what they tell me I can’t believe. How much cheaper everything is.Evan license plates for his truck was so much cheaper


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## sureshot006 (Sep 8, 2010)

Liver and Onions said:


> Wow. $7000 a year, damn.
> 
> L & O


Not at all uncommon in Wayne county, even with 100% homestead. If you were to buy a house right now for 250k in Rockwood, MI you'd pay 7k per year. If it was a 2nd home, it would be $9.3k/yr


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## Fishndude (Feb 22, 2003)

Yo, Lucky Dog. What you are failing to account for is that you receive a *discount *on the taxes for your Primary Residence. It is called the Homestead Property Tax Exemption. If you don't file for that when you purchase your home (within 45 days of closing) you will be taxed at the regular rates without a discount, and you will be subject to a $200 fine at some point.


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## Lucky Dog (Jul 4, 2004)

Fishndude said:


> Yo, Lucky Dog. What you are failing to account for is that you receive a *discount *on the taxes for your Primary Residence. It is called the Homestead Property Tax Exemption. If you don't file for that when you purchase your home (within 45 days of closing) you will be taxed at the regular rates without a discount, and you will be subject to a $200 fine at some point.


I realize I can get the Homestead exemption on a primary residence.
I'm talking about a secondary residence, and getting hit with the full millage rate.


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## Far Beyond Driven (Jan 23, 2006)

60' of Lakefront with a 2 bedroom cottage between Ludington and Pentwater. $7750 a year.


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## Hunters Edge (May 15, 2009)

If you are buying it for recreational property or a second home you may want to look at different hunt clubs. One that comes to mind is Canada Creek Ranch. Their are several in the state. This one comes to mind because of your post on taxes. It was took to Michigan Supreme Court (supposedly) on the land that everyone owns part of, their is no value ( their opposition on taxes). So they do not pay School tax on large tract (supposedly). The lot or two you purchase is taxed, however.

http://www.canadacreekranch.com

Is it a rumor, I will let you find out. The reality is taxes divided by 100 is cheaper than one paying the tab. Downside is you have access but do not own the land ( except the lot or two). Also rules similar to associations, but their are pluses. 

Also smaller clubs, sharing cabins etc but in these cases you own a piece of paper. Share of a corporation.

Or bite the bullet and pay the taxes on your parcel. Chances are you may never move to your property for or do to responsibilities. Like looking after you or your spouses parents or spouse will not move away from grandchildren, etc etc. Before purchasing have a serious talk with your spouse about future plans. This may give an insight on what you want to do today.


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## Hunters Edge (May 15, 2009)

Lucky Dog said:


> Maybe I'm just venting, but it sure seems like that from a property tax standpoint, the state of Michigan sure does not want folks to buy a second home or property.


They do. They just want your money and assume individuals or families that can afford a second home or property, can afford to pay more.


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## Lund Explorer (Jan 23, 2011)

Lucky Dog said:


> Maybe I'm just venting, but it sure seems like that from a property tax standpoint, the state of Michigan sure does not want folks to buy a second home or property.
> 
> Been looking for a place to retire to in ten years or so. In the mean time use it as a weekend / vacation destination. Found a nice place, calculated the property tax and at today's rate alone with no increases, would have 70K into it in property taxes alone in ten years.
> 
> How do other states tax second homes?


With a little more time spent thinking about it, you'll find that property taxes are the least of your worries.

Insurance?
Break-Ins & Lost Stuff?
Extra Utility Costs?
Maintenance Costs?
Vacation Time Lost to do all that Maintenance?
New Roof, New Well, New Septic?

Oooh, and don't forget those new tax law changes that will limit the income tax dedcutions you'll get on a second home.

Do yourself a favor.... Add up the total monthly cost of buying that retirement home now, deduct what it is going to cost you to go on those honey-do free weekends and vacations, and then put the net savings into an investment account that grows. When you decide to retire, you sell your first home which will allow you to buy the next place, and you'll have all those other savings to pay for the upgrades.


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## Far Beyond Driven (Jan 23, 2006)

Being able to hunt a two minute's paddle from a hot shower, cable, and Applebee's waiting on the table.










Having a place on the lake to renew your wedding vows, priceless.


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## Fishndude (Feb 22, 2003)

Lucky Dog said:


> I realize I can get the Homestead exemption on a primary residence.
> I'm talking about a secondary residence, and getting hit with the full millage rate.


I believe you can actually split your Homestead between multiple properties, in some cases. Or just Homestead your 2nd home, if the taxes are higher than the taxes on your Primary Residence. If owning a 2nd home was cheap, everyone would have 2.


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## Petronius (Oct 13, 2010)

Lucky Dog said:


> I realize I can get the Homestead exemption on a primary residence.
> I'm talking about a secondary residence, and getting hit with the full millage rate.


Are you married? Make the new place your primary residence and the current place would be your wife's.


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## MossyHorns (Apr 14, 2011)

petronius said:


> Are you married? Make the new place your primary residence and the current place would be your wife's.


I live in Berrien County and they have 1 person dedicated to catching people who try to get around paying non-homestead taxes. They just had an article in the paper about how many illegal homesteads they caught. They said it more than pays the salary of the person they hired a few years ago. We have a lot of people who own 2nd homes that are from Chicago. The taxes on those Lake Michian homes are pretty high.


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## sureshot006 (Sep 8, 2010)

petronius said:


> Are you married? Make the new place your primary residence and the current place would be your wife's.


You can do that?


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## Petronius (Oct 13, 2010)

sureshot006 said:


> You can do that?


Why not? Where does it say that you have to have the same residence as a spouse? You do the homestead on one property and the spouse does it on the other. But, you have to file income taxes separately, you can't file jointly.

http://www.bigrapidstownship.net/PDF/2856_GuideMiHmOwnPrincResEx.pdf

GUIDELINES FOR THE MICHIGAN HOMESTEAD PROPERTY TAX EXEMPTION

Page 5
*Qualified Homestead Property
10. My spouse and I each own and occupy separate homes. We file our tax return as married filing separately. May we each claim our home? *
Yes. Spouses who maintain separate principal residences may each claim his or her homestead, unless they file a joint income tax return.

Page 2
*Residency
2. What determines principal residence? *
The criteria Treasury uses to determine principal residence includes such things as: where you are registered to vote; the address on your driver’s license; where your children attend school; and the address from which you file your income tax returns.


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## MossyHorns (Apr 14, 2011)

petronius said:


> What can they do if you use the new residence on your drivers license, you register to vote there, you get mail there, and the other homestead is in your spouses name, not yours.
> There is no law that says you have to stay there 24/7.


You were correct! There was a loophole, but the law was recently changed to eliminate it. I just happened to read about it in the local news this morning.

https://wsbt.com/news/local/michigan-tax-loophole-closed-berrien-county-schools-benefit


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## Petronius (Oct 13, 2010)

MossyHorns said:


> You were correct! There was a loophole, but the law was recently changed to eliminate it. I just happened to read about it in the local news this morning.
> 
> https://wsbt.com/news/local/michigan-tax-loophole-closed-berrien-county-schools-benefit


Unfortunately, the article says a loop-hole was closed, but doesn't what the law MCL number is or really explain anything about it.


I found it. The law referred to in the article makes it illegal for out-of-state residents with second homes in Michigan to claim a homestead exemption here.
So that is a different situation than a Michigan couple splitting their household between to homes.

*Governor signs bill to close tax loophole for out-of-state homeowners*
https://www.mlive.com/news/index.ssf/2017/10/governor_signs_bill_to_close_t.html


https://www.michigan.gov/documents/taxes/Public_Acts_121__122_of_2017_603714_7.pdf


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## fels340 (Nov 9, 2011)

Lucky Dog said:


> Maybe I'm just venting, but it sure seems like that from a property tax standpoint, the state of Michigan sure does not want folks to buy a second home or property.
> 
> Been looking for a place to retire to in ten years or so. In the mean time use it as a weekend / vacation destination. Found a nice place, calculated the property tax and at today's rate alone with no increases, would have 70K into it in property taxes alone in ten years.
> 
> How do other states tax second homes?


Lucky, let me give you the information that I know. I was faced with this same situation several years ago and had the same thoughts as Petronius. He's dead wrong. It's easy to look at the laws on the internet and think you have a case to claim both homes. I did further research on this before I tried it. I basically got professional help. I consulted an attorney and CPA both with over 40 years experience each. Both said the same thing. Don't do it. These accessors and the State have heard these same arguments literally hundreds if not thousands of times. The State of Michigan has been losing millions of dollars in tax revenue each year to people who are trying to do what Petronius suggests so they have made a point of pursuing these people. First off, filing separate tax returns will result in higher taxes. And this guarantees nothing. So deduct that from your potential savings. My CPA friend has a practice that only services doctors and dentists. Many of his clients have second homes. Several of them have tried to homestead their second homes and every one of them has been caught by the assessor and every one of them has lost their case. I personally know one of his clients who hired a high priced attorney to represent him. It was kind of funny because he's pretty cocky and was spouting off about how he hired this attorney and how he was going to beat this no problem. Well, he lost. He tells people not to do it. They will catch you and you will lose. And to top it off, once they catch you, you'll owe all the back taxes. So if you have a place with an SEV of $175,000 and you get away with it for 5 years, you will get a tax bill for 15,837.50 for back taxes in addition to your current tax bill of $7000 (approximately depending on the township). So you would get a bill for $22837.50 if it takes them 5 years to catch up to you. Are you willing to take that chance? My CPA friend has a place on a lake near Alpena and he doesn't homestead that place. That should tell you something. These accessors up here are driving around midweek and checking on these properties that are homesteaded to see if people are there. If they feel that it isn't a qualifying property, they will switch the property to non-homestead and the burden of proof is then on you to prove it's your primary residence. Guilty until proven innocent. I can give you at least 5 examples of people I know who have done this and lost. If you are even contemplating trying this I would suggest getting professional advice first. It could be the best $200 you ever spent.


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## sureshot006 (Sep 8, 2010)

fels340 said:


> Lucky, let me give you the information that I know. I was faced with this same situation several years ago and had the same thoughts as Petronius. He's dead wrong. It's easy to look at the laws on the internet and think you have a case to claim both homes. I did further research on this before I tried it. I basically got professional help. I consulted an attorney and CPA both with over 40 years experience each. Both said the same thing. Don't do it. These accessors and the State have heard these same arguments literally hundreds if not thousands of times. The State of Michigan has been losing millions of dollars in tax revenue each year to people who are trying to do what Petronius suggests so they have made a point of pursuing these people. First off, filing separate tax returns will result in higher taxes. And this guarantees nothing. So deduct that from your potential savings. My CPA friend has a practice that only services doctors and dentists. Many of his clients have second homes. Several of them have tried to homestead their second homes and every one of them has been caught by the assessor and every one of them has lost their case. I personally know one of his clients who hired a high priced attorney to represent him. It was kind of funny because he's pretty cocky and was spouting off about how he hired this attorney and how he was going to beat this no problem. Well, he lost. He tells people not to do it. They will catch you and you will lose. And to top it off, once they catch you, you'll owe all the back taxes. So if you have a place with an SEV of $175,000 and you get away with it for 5 years, you will get a tax bill for 15,837.50 for back taxes in addition to your current tax bill of $7000 (approximately depending on the township). So you would get a bill for $22837.50 if it takes them 5 years to catch up to you. Are you willing to take that chance? My CPA friend has a place on a lake near Alpena and he doesn't homestead that place. That should tell you something. These accessors up here are driving around midweek and checking on these properties that are homesteaded to see if people are there. If they feel that it isn't a qualifying property, they will switch the property to non-homestead and the burden of proof is then on you to prove it's your primary residence. Guilty until proven innocent. I can give you at least 5 examples of people I know who have done this and lost. If you are even contemplating trying this I would suggest getting professional advice first. It could be the best $200 you ever spent.


Exactly...

Petrionus is still correct in a way... you can legally do it if you're honestly living that way, but in the vast majority of cases, its fraudulent and you will most likely get caught.


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## Groundsize (Aug 29, 2006)

You could buy the property if its going to be land and not just a lot. Then enroll the land being 20 or more into a forestry program assuming there are trees on the land where the school mills would be reduced or removed cutting your tax rate in half until you at some point decide to build a residents on the property at that time you would then homestead.


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## Swampdog467 (Jul 6, 2017)

Groundsize said:


> You could buy the property if its going to be land and not just a lot. Then enroll the land being 20 or more into a forestry program assuming there are trees on the land where the school mills would be reduced or removed cutting your tax rate in half until you at some point decide to build a residents on the property at that time you would then homestead.


Even if you put a cabin, cottage, home, etc. on it you can still leave the forested part in that program to leave the school millage off. This also works with ag land or forest and ag in combination. For ag the property has to be over 50% tillable. If you don't have that amount tillable you need to enroll in the forest program but the ag can still be combined into the total. Obviously there is only an advantage where there is enough acreage for the value to offset from any dwelling that might be on the property. 

Sent from my XT1585 using Michigan Sportsman mobile app


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