# More on property taxes



## Lucky Dog (Jul 4, 2004)

So I understand that when a property is sold, it triggers an automatic reassessment.

What determines the new assessed value?
Seems that typically it is the selling price of the property, but is that the law?

Say a property sells for less than the current assessed value? will the property assessment go down to match the selling price? 

Is it always selling price that dictates the new assessment? or are there other factors that get taken into account?


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## Petronius (Oct 13, 2010)

I thought the assessment happens once a year and is not necessarily dependent on the last selling price.


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## Fishndude (Feb 22, 2003)

petronius said:


> I thought the assessment happens once a year and is not necessarily dependent on the last selling price.


Why change the story to make things confusing? Lucky Dog specifically asked about a re-assessment _*when a property has sold.*_ 

Yes, Taxing Authorities will almost always re-assess a property when it sells, and the new Taxable Value, and Assessed Value should reflect the Sale Price. However, there are times when the Sale Price is far from market - like when a sale occurs between relatives and not for any profit. Some people "sell" their property to relatives for $10. In those cases, the Tax Assessor will value the property based on what similar properties in the area have sold for recently.


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## plugger (Aug 8, 2001)

When a property is sold it is uncapped where the increases had been limited by Headley. When it is sold the taxable value equals the accessed value.


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## Lucky Dog (Jul 4, 2004)

Fishndude said:


> Why change the story to make things confusing? Lucky Dog specifically asked about a re-assessment _*when a property has sold.*_
> 
> Yes, Taxing Authorities will almost always re-assess a property when it sells, and the new Taxable Value, and Assessed Value should reflect the Sale Price. However, there are times when the Sale Price is far from market - like when a sale occurs between relatives and not for any profit. Some people "sell" their property to relatives for $10. In those cases, the Tax Assessor will value the property based on what similar properties in the area have sold for recently.


Thanks. So what you are saying is that the assessor can trump selling price if the assessor feels the selling price was out of line?


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## sureshot006 (Sep 8, 2010)

Lucky Dog said:


> Thanks. So what you are saying is that the assessor can trump selling price if the assessor feels the selling price was out of line?


Yes


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## sureshot006 (Sep 8, 2010)

petronius said:


> I thought the assessment happens once a year and is not necessarily dependent on the last selling price.


It does happen every year. Thing is, the increase in taxable value is restricted to 5% or less. Not so when you purchase.


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## sureshot006 (Sep 8, 2010)

If you feel your assessment is out of line, you can appeal. There is a process for that.


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## Lucky Dog (Jul 4, 2004)

sureshot006 said:


> If you feel your assessment is out of line, you can appeal. There is a process for that.


I've had first hand experience with appealing my assessment a couple times. The process is a joke and the chances of getting the assessment changed are slim.


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## sureshot006 (Sep 8, 2010)

Lucky Dog said:


> I've had first hand experience with appealing my assessment a couple times. The process is a joke and the chances of getting the assessment changed are slim.


I know a few people who were successful. Seems all about your prep.

I have personal experience with appealing homestead exemption. I had to wait literally years for the court date, but I was very well prepared and it was over in minutes.


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## FISHMANMARK (Jun 11, 2007)

Lucky Dog said:


> Thanks. So what you are saying is that the assessor can trump selling price if the assessor feels the selling price was out of line?



Yeah, we bought our cottage during the last crash. It had sat vacant for over a year, we threw them a lowball price and they accepted it. Our tax appeal was denied because "the selling price doesn't reflect the true market value." 

Which is complete BS... the selling price after sitting vacant for a year IS the definition of "true market value".


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## Waif (Oct 27, 2013)

Lucky Dog said:


> I've had first hand experience with appealing my assessment a couple times. The process is a joke and the chances of getting the assessment changed are slim.


Previous homestead I have had reduced.
Offered the board to cut me a check for what their assessment was and essentially I'd laugh all the way to the bank while they sat on an alligator of a home.

Had my non-homestead property tax reduced too ,after they claimed it had gained about 25% in value (with it having been sold repeatedly in the not too distant past and my knowing what the previous short term owner paid) but they could not explain why without like valued property to compare to. 

Not knockin folks for what they do. But keeping them honest...
All parties have for the most part been good to work with. Just some that did not research the true values. If that makes sense.

No sense claiming it is worth less than it is in fairness either. I expect to have to prove my claims.


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## PerchOnly (Oct 24, 2007)

FISHMANMARK said:


> Yeah, we bought our cottage during the last crash. It had sat vacant for over a year, we threw them a lowball price and they accepted it. Our tax appeal was denied because "the selling price doesn't reflect the true market value."
> 
> Which is complete BS... the selling price after sitting vacant for a year IS the definition of "true market value".


While you're right, your housing scenario occurred during a recession. Most assessors did not handle home values correctly because they didn't know how to handle values during a recession. Plus if they lowered the values to what things sold for, tax revenue would have dropped wildly.

Check to see if your house is appraised correctly today, it may still be overpriced. Not all markets recovered.


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## sureshot006 (Sep 8, 2010)

FISHMANMARK said:


> Yeah, we bought our cottage during the last crash. It had sat vacant for over a year, we threw them a lowball price and they accepted it. Our tax appeal was denied because "the selling price doesn't reflect the true market value."
> 
> Which is complete BS... the selling price after sitting vacant for a year IS the definition of "true market value".


Yep, this was especially true of foreclosed homes.


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## Nighthawk (Jan 8, 2010)

a sale does not create an automatic reassessment. read post 4


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## sureshot006 (Sep 8, 2010)

Nighthawk said:


> a sale does not create an automatic reassessment. read post 4


If that's the case it's funny how the sale price exactly matches the new assessment.


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## JimP (Feb 8, 2002)

sureshot006 said:


> If that's the case it's funny how the sale price exactly matches the new assessment.


10 years ago ours was a vacant foreclosure for 2 years. Lousy pictures in it's file left it untouched until I took an on site look that showed it was a hidden jewel, needed some grass cutting and paint on the deck. Immediate neighbor was the brother of the deceased owner and it was watched over for that two years with full winterizing and no vandalism. Right in the middle of the Fannie Mae "Crisis" the Gov't took our offer - roughly 1/3 the original mortgage. It did go on the rolls at that sale price for the next 2 years but has now crept up to more closely meet the market value. Payments are still 1/2 those of my son's new pickup.


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## fels340 (Nov 9, 2011)

Lucky Dog said:


> I've had first hand experience with appealing my assessment a couple times. The process is a joke and the chances of getting the assessment changed are slim.


I have had my assessment reduced 3 times. The first 2 times it was reduced by the Board of Appeals in my local township. I had a recent appraisal to present to them plus copies of recent sold properties I got from a realtor. You can get a lot of these online also. The 3rd time I was turned down by the Board of Appeals so I filed with the Michigan Tax Tribunal. I got a hearing date within a couple months. But here is where I learned something that may be helpful to you. Contact your local assessor. He may be a jerk and stick to his guns or he may be a guy like I had. A local guy just trying to do the best job he can. Mine actually contacted me and asked if we could come to a mutually agreed upon value. This works if you're both reasonable. In my case we came up with a value that was more than fair for me. We parted as friends and the best part was when I did an addition on my place and he came over to reassess he didn't hammer me but was very reasonable with the new value.


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## Lucky Dog (Jul 4, 2004)

Nighthawk said:


> a sale does not create an automatic reassessment. read post 4


The way I read post 4, it does say that a sale will create an automatic reassessment.


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## TrailMarker (Dec 8, 2012)

Lucky Dog said:


> I've had first hand experience with appealing my assessment a couple times. The process is a joke and the chances of getting the assessment changed are slim.


I think it depends on the municipality or township, but overall I have had good to excellent success with it, easily have saved thousands in taxes.


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