Four Tips on Appealing Your Property Tax Assessments

In Detroit, property owners are mailed letters in January that say how much the city has assessed their properties at. The amount factors into what homeowners will have to pay in property taxes. If property owners think the city over-estimated the amount, they can appeal.

The appeal hearings take place on the 8th floor of the Coleman A. Young Municipal Center in a windowless room. There’s a long boardroom table that seats members of the Board of Review. A white board has “WELCOME B-O-R” written on it in red marker, all caps.

Laura Herberg

The Board of Review meets in a windowless room at the Coleman A. Young Municipal Center in Detroit.

The process is a push-and-pull between the property owner and appraisers, who file in one at a time to make their case.

The petitioner is given a chance to explain why they think the property is inaccurately assessed. Then an appraiser explains why they think the assessment is correct, using the price of the property and other properties nearby to justify their decision. After hearing both sides, the Board of Review either holds or lowers the assessment.

Sounds easy, right? Not quite. I was able to watch this process for four people disputing assessments for a total of eight properties, a small sample of how many the Board of Review might see over the roughly month-long period. Here are my takeaways.

Click the audio player above to hear Laura Herberg’s report from the tax assessment hearing.

1. Say what now? Know the lingo before going in

Laura Herberg

Clifford Austin, property owner, needed clarification on the proceedings.

Thank God for Clifford Austin Jr, because if he hadn’t asked so many questions I would have had no clue what was happening.

Austin came down to the March Board of Review because his lawyer forgot to file some paperwork, and that resulted in his property having a much higher assessed value than expected. He explained this to the chair of the board, Willie Donwell, and then this is the resulting exchange:


Donwell: So what will happen today, Mr. Austin, is that the property will be recapped. The assessable value will remain the same, but the taxable value will increase by the rate of inflation…

Austin: What does that exactly mean now?

Donwell: So, what that means is that the assessed value, based upon the sales study that was done by the office of the assessor for 2019, is $14,600. But your taxable value, the amount that’s used to actually calculate your property taxes… is being increased this year only by the rate of inflation, so it will not be $14,600. It will be $8,333.


Got it? Yeah, me neither. After Austin’s hearing ended, I walked up to him in the hallway and genuinely thanked him for asking so many questions.

I know I was confused,” he admitted, “taxable value, non-taxable value. But by the end I think I started to follow what he was saying.”

 

2. Individual homeowners can appeal, but none showed up when I watched

Before I went down to the hearings, I imagined that the people appealing their assessments would be similar to the people I see when I go to community meetings in Detroit: Senior women who have owned their homes for decades.

Laura Herberg

David Codd, property owner from St. Clair Shores

However, on the day I went down there, the four people I observed appealing their assessments were landlords and developers. None of the men said they lived at these properties. At least one of them, David Codd, didn’t even live in Detroit.

Codd came down from St. Clair Shores to appeal assessments on three of his properties.

I’ve owned this house now for a few years,” said Codd. “When I bought it, it was a crack house.”

One of the other petitioners, Scott Sell, bought his properties with a company he owned when he lived in Los Angeles, though he said he now lives in Detroit.

Again, a four person sample is small. But this makes me wonder who is taking advantage of the appeals process. Is it mostly just people who own houses as a business or are single homeowners participating as well?

3. Don’t Assume You’ll Pay The Same as Past Owners – Or Your Neighbors

If you buy a property from someone who owned a house for a long time, there’s a chance that you will pay a lot more in property taxes than they did.

Scott Sell came down to petition the assessments of three properties he owns.

Before I purchased them, I knew what the old owners were paying in property taxes, so I financed everything off of that assumption,” explained Sell.

After Sell purchased the properties, he saw his property taxes more than double what the previous owners paid. Turns out, this is totally legit!

In Michigan, the taxable value of your property is capped, meaning it can only increase each year by five percent or the rate of inflation, whichever is lower. This is to ensure your property taxes don’t skyrocket year-over-year, even if the property’s value is rising with the surroundings.

But, when the property transfers ownership (when it’s sold to a non-blood relative like Sell), this cap is removed.

This is why your neighbor could have a house that for all intents and purposes is identical to yours, but pay different property taxes. Because of the cap, if your neighbor has owned their home property for a while and you just bought yours, they may pay a lot less than you do.

 

Laura Herberg

Property owner Donnell Harvey

4. If You’re Doing Repairs, You Should Appeal – But Make Sure to Have Proof

On the day I observed the hearing, the three men who said they were doing work on their properties saw their assessments lowered.

Codd, from St. Claire Shores, explained that one of his houses had foundation damage. Another landlord, Donnell Harvey, said he’s in the process of renovating his property little by little “so it’s not an endangerment to the neighbors.” Sell said that everything needs to be fixed on one of his properties.

These repairs matter for two reasons. First, if the necessary repairs are inside the home, the appraisers don’t know about them.

The other reason it’s important petitioners highlight repairs is that these issues may represent losses to the property, and losses to the property affect the taxable value of the home. That said, if a repair is adding new value to the home, say, if the homeowner is building an addition or a garage, then this may actually increase the taxable value of the home.

So, you may want to report interior repairs that aren’t visible to assessors from the street. But if you’re converting your attic to a master bedroom, then you may actually end up paying more in taxes.

When these three men mentioned that they were all doing work on their properties, the chair asked if they had photos or estimates with them to prove it. Each of the men seemed surprised by this question, none of them had supporting material with them.

The board asked the petitioners to email photos and estimates to the chair within four days. I followed up with the three men after the hearing. Two of them said they were able to email these materials and that the city changed their assessments as recommended. One of them said he was not able to email materials but that the city still changed his assessments in the manner the board said they would.

Image credit: Laura Herberg

About the Author

Laura Herberg

Community Reporter

Through sound-rich storytelling, Herberg covers stories about the people inhabiting the metro Detroit region and the issues that affect them. Michigan Associated Press Best Reporter 2018 and 2017.

Follow @HerbergRadio

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