[Awaiting2012]

I currently live in PA and have retired. The wife and I were thinking about moving as we have lived here for quite some time and would like a change of scenery. One of the states we looked at was Michigan due to the recent drop in home prices and the climate is similar to where we are (not far from the Poconos).

The thing about Michigan after researching though is your tax rate. It's just INSANE. Summer/winter taxes? Areas with decent homes that are over $10,000 in tax a year? It looks as if the only place taxes are low are in the city like Detroit, which we wouldn't want to live in being older than the average city resident probably. Currently in PA I pay under $3, 000 a year and I'm wondering.. exactly how do you Michiganers get along with taxes that high?


We could easily sell our home here in the Lehigh Valley and buy a house twice the size or larger in Michigan but our taxes would triple or more, so that doesn't seem sane to us at all.

[Bydand]

I live in a very good neighborhood, walking distance to our little downtown, less than a block away from the schools. House is not real big, but not tiny either at around 2200 square feet. oak hardwood floors throughout (even the closets) full basement (not included in sq/ft figure), 1/2 acre lot. Great well established neighbors. A couple miles from Lake Michigan so not real close, but just a couple minute drive to some great beaches. Taxes? less than $2500 a year and we are high for the surrounding area. A few miles out of town and that would drop in half. Taxes vary widely throughout the State. You cannot look at one town or neighborhood and assume the whole state has the same basic rates.

[michmoldman]

We have been looking many, many houses because we plan on moving in a year or two, and most all the houses we have looked at in the northern lower penninsula have taxes equal or many times less than what we pay here. We have a nice 1600 sq ft. house, in a nice neighborhood, and pay around $3000 a year.
We have been looking in the 150-190,000 range.

[Driller1]

Much of the tax is millages. Where I live we vote NO on most.

[Bydand]

Originally Posted by Driller1

Much of the tax is millages. Where I live we vote NO on most.

That is exactly why ours is higher here than just the next town over. We built a new school a couple years ago and totally refurbished the other ones in the system at the same time. It was BADLY needed and once people saw just how bad it was getting, the new millage passed. That and we voted to join in Ludington's dial-a-ride system so the taxes are a tiny bit higher, but the fares for local residents are a LOT lower. We have a bunch of Scottish farmers around here who hate to spend a dime, but will not hesitate to pass something if they see it really is needed for the betterment of the town.

[Sparrow_temp]

I was paying $4300/yr in property taxes on a single lot home in Holt. Thought it was completely outrageous and I too always voted NO on any local tax increases. The problem with the vote is that they'll just submit it for another vote until it passes -- normally when turnout is low and those that are advocates of whatever the tax is have a larger relative percentage of the turnout (ie special elections).

[MI-Roger]

Each State obtains the funds to operate a little differently, but no one can do it for free.

Summer/Winter taxes: We pay half of the total property tax bill in summer and the other half in winter. If a home has a $6K tax bill it is paid in two, approximately equal, installments. You do not pay the $6K twice each year!

Pensions: I don't know about PA, but in Michigan all pensions are free from income tax. You said you are retired so this may be important to you.

Sales Tax: Recently raised to 6% as part of a movement to shift school operating funds away from property taxes. No sales tax on food.

Income Tax: If I remember correctly, our current income tax rate is a nearly flat 4.2% rate. In addition there is a homestead tax provision to benefit property owners who pay an unusually high percentage of their income on property taxes.

Headlee Amendment: This can be a "gotcha" when buying a home so learn about it. This amendment resulted in a limit on property tax increases each year. Property taxes are limited to increase by the smaller of either 5% or the rate of inflation. The limit is applied when calculating the "State Equalized Value" of the property which is different than the market value. When a home is sold, the SEV for that property is immediately reset to 50% of the market value. I have lived in my home for 28 years so my SEV is substantially less than 50% of market, at least it was until the market went bust last summer. The taxes paid by a current home owner may be substantially less than the taxes paid by the new owner after the home is sold. Although the difference may no longer matter because of the recent rapid fall of home values.

[magellan]

Originally Posted by Awaiting2012

I currently live in PA and have retired. The wife and I were thinking about moving as we have lived here for quite some time and would like a change of scenery. One of the states we looked at was Michigan due to the recent drop in home prices and the climate is similar to where we are (not far from the Poconos).

The thing about Michigan after researching though is your tax rate. It's just INSANE. Summer/winter taxes? Areas with decent homes that are over $10,000 in tax a year? It looks as if the only place taxes are low are in the city like Detroit, which we wouldn't want to live in being older than the average city resident probably. Currently in PA I pay under $3, 000 a year and I'm wondering.. exactly how do you Michiganers get along with taxes that high?


We could easily sell our home here in the Lehigh Valley and buy a house twice the size or larger in Michigan but our taxes would triple or more, so that doesn't seem sane to us at all.

You didn't give us the market value you used to reach that $10,000/year in taxes. Or where you were looking.

Just because you get a property tax bill twice a year doesn't mean you're getting taxed twice as much. Also, you may have been looking at non-homestead tax rates (for a second home). Non-homestead is generally 60 - 70% more or so.

Most areas of Michigan, you'll find the millage rate to be about 1.5% - 2.0% of your market value per year. So to reach your $10,000/year, you'd be talking about an $800,000 home. Is that about your price range? Because that's way higher than the median home price ($150's to $200's).

We pay about $3300 on a $250,000 home (suburban township just outside of Grand Rapids).

[alliteration]

Originally Posted by Sparrow_temp

I was paying $4300/yr in property taxes on a single lot home in Holt. Thought it was completely outrageous and I too always voted NO on any local tax increases. The problem with the vote is that they'll just submit it for another vote until it passes -- normally when turnout is low and those that are advocates of whatever the tax is have a larger relative percentage of the turnout (ie special elections).

Yeah, Delhi Twp has some really high taxes, since they want to try and turn Holt into an actual town with a downtown and everything. Taxes will run you typically about 4500 there.

[chance2jump]

All depends on where your home is and the value of your home. We have 10.5 acres of clear land that is classified as residential (hard to compare to land with a house, I know...) in Eaton Co. Yearly taxes run about $700. The taxes are not nearly as high in that area as, say, Holt or Mason, but still convenient to Lansing.